The Aristocracy of the Mag 7 Take a Breather: MSFT & AMZN Eye Consolidation
The Aristocracy of the Mag 7 Take a Breather: MSFT & AMZN Eye Consolidation
Both Microsoft and Amazon appear to be nearing consolidation phases after establishing new volume bases. Let's delve into the details for each stock:
Microsoft - $Microsoft(MSFT)$
Support & Resistance: The $433 level acted as a support/resistance line throughout the week, potentially indicating upcoming consolidation around the current volume base (A) formed since February.
MACD Crossover Watch: A potential bearish crossover on the MACD indicator is forming. Confirmation of this crossover warrants attention, as it previously signaled a price consolidation period (Base C) on the chart.
Short-Term Support: The $410 and $400 levels have served as temporary support lines since March, offering potential defense levels.
Bullish Outlook: The overall chart structure for MSFT remains bullish. Crossing $433 could pave the way for a move towards $490.
Amazon - $Amazon.com(AMZN)$
Base & Support: The lower edge of base A on the chart sits at $165, aligning with the current position of the 50-day moving average (50DMA). Consolidation to this level would still be considered constructive within a long-term bullish context, provided it holds.
Stochastic & Doji: A bearish crossover in the Stochastic indicator and the presence of a large doji-type candle raise the possibility of a price decline next week.
Resistance at $178: AMZN has encountered rejection at $178 for three consecutive weeks. This level coincides with a significant annual support/resistance (S/R) line, similar to the $5,110 level for the S&P 500 $SPX and can create turbulence.
Trading Strategies: Depending on the own trading style, some investors might prefer to enter a long position after a breakout above $178, while others might choose to manage the potential volatility with a stop-loss order placed considering $165 if things go south.
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