MSFT – Microsoft Corporation

This is a 10 year monthly candlestick chart for MSFT. I chose a 10 year chart for MSFT so you can see what is the end of another major Bullish Impulse wave pattern. October formed a Bearish Engulfing candlestick pattern and it looks like December is going to also. At the very minimum I would expect December to end up with a Dark Cloud Cover candlestick pattern.

The candlesticks for both October and December are both long-term bearish candlestick patterns on volume confirmation. This is a long-term correction that has started for MSFT.

Look for reversal signs starting at a 50% Retracement from the red Fibonacci Retracement Tool. The red 50% Retracement Line aligns well with the bottom of Wave 4 in the Bullish Impulse wave pattern. The 50% Retracement could be the bottom of Wave A in the correction.

But I think MSFT will eventually find the 68.2% Retracement. That will most likely be the bottom of Wave C IMO. I think this because the 68.2% Retracement aligns more with the bottom of wave 2 in its Bullish Impulse wave pattern. And MSFT has an Extended Bullish Impulse wave pattern it is correcting, just like the NASDAQ. That means I need to look towards the bottom of Wave 2 of the Bullish Impulse wave pattern, similar to the price level I am looking at for the NASDAQ.

The MACD Histogram shows buying momentum that has been decreasing fast for MSFT also, not a good sign. With the start of January 2019’s monthly candlestick only 1 trading day away, it won’t be long to see how the month of January starts out. Early signs of selling momentum or continued decreasing buying momentum will be additional confirmation of the long-term downtrend.