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MSFT: When Good News Follows Strong Technicals


Microsoft (MSFT) had strong earnings last Wednesday, which set up a run to new record highs. Let's go through the action.

I got long Thursday, and added to my position Friday for a swing.

And today, the stock gapped up to new all-time highs after the company won a $10 billion contract with the Pentagon, beating out Amazon (AMZN).

I sold a big portion between $144.50-$145.50 and now I'm in management mode.

Let's go through the technicals that led us into the good news.

First, the stock did a Red Dog Reversal long ahead of earnings on Wednesday — following 4 down days for the stock.

That RDR was at $136.26.

Then, on Thursday, the stock gapped up after earnings and held.

Friday was another nice upday that gave me more confidence in the move.

And today, the stock gapped up huge on the Pentagon news. It flew past that trendline at $141.80ish like it wasn't even there to hit a new all-time high at $145.67.

Here's a bigger view of the chart:

This shows you an important lesson: when you get the technicals right, the news tends to flow in your favor.

Positions Disclosure: As of 10/28/2019 at 1:25 p.m. ET, Scott J. Redler was long SPY, BAC, MSFT, UBER, PINS, SNAP, LYFT, SLV calls, BYND calls, GOOGL calls; is short AAPL, JPM calls