As you know, I’ve had my eye on and been trading the software sector for weeks now. Trying to focus on capitalizing on unfair smack downs of stocks under the threat of AI obsolescence. Earlier today I added a couple, per the in-day notes.
Here I want to show a chart of the daddy of them all, Mister Softee. Upon seeing the chart I added back the IRA position that had been sold previously. Not only is this a clear setup where support meets the (blue) SMA 50. But that marker provides a strict tolerance level and the support line below it at 392 provides a more tolerant level to raise caution.
Meanwhile, the price never did quite get to the gap-fill level of 475 before dropping in a sharp flag on declining volume. Success here would depend on the market not falling apart. But as it goes through its rotations I have a hunch software will rally again. Also, MSFT is one of those stocks that would benefit from passive in-flows to index funds, if passive investing is still a thing.
Depending on what’s going on in the broad market, I’ll manage risk on the new position if it drops below 409 and not be too lenient. Considering I have a position I am somewhat more committed to in the ‘savings’ account.
NFTRH+ trade setup ideas are presented for consideration and further research only, not as recommendations. I may or may not personally take positions in all or even most NFTRH+ ideas, as it would depend on my portfolio composition at any given time. “Stop loss” and target levels are usually noted and should be respected.
… and falling volume during sp decline would be a positive?
or not for you?
Yes, a bull flag would typically decline on declining volume. But it’s a really sharp flag, so I don’t really want to call it a bull flag. But the volume theory is the same. Want to see declining volume after a spike and during a pullback.