The Make or Break Week?

On July 16th we wrote about the shooting star candlestick trading formations which signaled to us that the boat was finally nearly full of longs and absent shorts. In part it was difficult to tell how much of the action was being obfuscated by the NDX rebalance which was done on Friday and saw some wicked moves intraday. At one point, Microsoft was up around lunch time and then was down $6 with an hour to go in trading, a $42 billlion market cap swing intraday. We wrote in our WhatsApp chat that we were buying the stock down $3-5 with the thought of a positive anticipation trade Monday and into Tuesday night EPS. That trade worked out well and we sold 1/2 on the bounce into the close. That’s trading! So, this week all you need to know is the chart below.

Let’s discuss the setup now.