Microsoft Corp. declined from $37.50 to $14.87 (A-B), and after a recovery rally to $31.50 (C), settled into a wedge pattern made up of lower highs and higher lows (dashed lines). It rallied above this formation recently ($32.95 – D), which signalled the breakout from the large wedge and the start of a new up-leg. The stock is currently extended and a pullback would be healthy to provide a good entry point. Only a decline below the wedge (currently about $27) would be negative. Point & Figure measurements provide targets of $34 and $39. Higher targets are visible.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. Ron Meisels is a contributor to the www.NA-marketletter.com website. They may hold shares in companies profiled. Please see the site for a glossary.
Chart source: www.decisionplus.comReport Typo/Error
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