MSFT looks like a “close your eyes and buy” situation to us here at TickerTank. After a downside earnings gap (purple oval), the stock managed to stabilize in the 26.50 area. Now MSFT looks to be gearing up for an Inverse Head & Shoulders neckline resistance break.
A neckline break would likely lead to a quick gap fill, and ultimately a measured move to the 28.75-29.00 range. Looks like a nice place to consider selling some Feb13 27 Puts.
We just noted a bearish setup in DIA that has yet to be validated. Well here’s a bearish setup in another major indice, QQQ, that is valid and in play.
QQQ has formed a head & shoulders pattern (gray ovals) over the past two months. Yesterday is broke below neckline support (blue line), which validates this pattern. The measured move (pink rectangle) takes QQQ to 65.50, which puts it on on 1-year support (purple line).
We missed the initial break, but will be watching for a retracement to the 68.00 price area to short into. An AAPL retracement to 660 as mentioned in this article would certainly help that cause.
All in all the indices are noting continued bearish price action, but we are expecting a few upside days which will present excellent bearish strategy entry opportunities.
click image to enlarge
There is a Head & Shoulders pattern in the works on S&P 500 emini futures (/ES). Note the three grey ovals representing the left shoulder, head, and right shoulder. The up sloping purple line represents the neckline support of this pattern, which is being tested as we speak. The blue rectangle measures the move from the top of the head to the neckline directly below, then we duplicate that move assuming a neckline break some time this week to show the measured move if this formation comes to fruition. In the end, the green oval indicates a measures move in the 1275-1290 range, which takes it back to previous resistance turned support as well as the 200 day simple moving average support.
Makes a lot of sense, and we intend to position bearish if the neckline support breaks in the coming days.
We are noting an inverse head & shoulders neckline resistance break in both Soybean & Soybean Meal futures. This presents a large potential reward opportunity on the buy side if you are comfortable with this product.
We may trade this, but will keep our position small since we are not extremely comfortable with Soybean Futures. These are liquid futures, so we’re comfortable enough to do a couple contracts. No position yet, but will likely buy one contract then another if the position starts to work.
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