“Hello, I read your book as soon as it was published and I plan on going to one of your courses in London in the fall or in 2015, in the meanwhile I practice. So, I would like an opinion on the Microsoft graph, seems like it is breaking out, so you agree? If it holds 38 / 40 dollars on monthly graph seems it will go up, I am looking at the long term graph from 1999 to today”

Eoin Treacy's view

Thank you for this question and I look forward to welcoming you to a future venue for The Chart Seminar. Microsoft is one of the original cast of Autonomies because of its global franchise, leadership in its niche, solid balance sheet and impressive record of dividend increases. The market appears to be reacting well to the company’s change of leadership. 

The share spent 13 years forming a Type-3 base formation below $35 and broke upwards in November. Lengthy ranges are explosions waiting to happen and Microsoft has been rallying consistently since early 2013. Considering how psychological the $35 area was I would be reluctant to put too much focus on the $38-40 area. A leveraged trader might be looking at that level but an unleveraged investor should be able to give the position more room to potentially pullback towards the upper side of the base. A sustained move below $35 would be required to begin to question medium-term scope for additional upside.