Please click here to see the annotated chart of Microsoft.
Today Microsoft announced its long-awaited restructuring. The question now is should you buy the stock on this news?
Steve Ballmer, CEO of Microsoft MSFT , called it a far-reaching realignment. In lieu of regurgitating the details, allow me to redirect you straight to an internal email in which Ballmer describes his thinking in detail.
In my opinion, this realignment is a step in the right direction. However, it does nothing to correct the main problem afflicting Microsoft: the lack of a clear cohesive vision.
This realignment is of particular interest to me because this is a big change, and my entire investment method is based on generating profits from change. The method consists of six screens. The technical-analysis screen is about half traditional technical analysis and the other half is our proprietary indicators. To answer the question, should you buy the stock on this news, let us start by looking at the annotated chart.
The chart shows that the stock is currently at resistance. The support zone shown was a resistance zone before the recent breakout. Two points are noteworthy about the last breakout.
First, the stock was making higher lows prior to the breakout. Second, the breakout on the monthly chart was a clean decisive breakout without any hesitation. An observation of these two points would have told an astute investor that the probability of Microsoft moving to the next resistance level was high…Read more at MarketWatch
