Eyes On Microsoft

Hey 5-Star Trader,

Large-cap stocks can be categorized as any company whose market capitalizations are $10 billion or above. Earlier this week, I tweeted that Microsoft was sitting right on the daily 50 simple moving average (SMA). But why is this important?

Often a large-cap’s individual health can provide clues to the overall market sentiment. So, when they have huge moves or unexpected behavior, such as Microsoft touching the 50 SMA (pictured below), it is important to take note.

When Microsoft hit the daily 50 SMA it told me a few things. Historically speaking, when Microsoft behaves this way we often see it bounce and that is exactly what we saw the following day. Additionally, because it is such a large-cap stock with huge influence over the market, I figured if Microsoft could bounce, the overall market would follow in its place. It seems like that has come to fruition with the rally we got the very next day.

Historical data and large-cap behavior can certainly be used to your advantage if you know what the clues are trying to tell you. Stay sharp traders!

-Danielle =)

Up Next...

Walmart: Earnings in Focus

Walmart Earnings: May 16th Walmart is reporting earnings on Thursday, May 16th, before the bell. This is one of the most important earnings reports this week because it will show investors how the largest retailer in the United States and the world is faring. Between high inflation, consumer sentiment, and behavior, various factors could impact … Read more

Read More

Trading Directional Butterflies

Earnings Strategy In this Trade Review video, I cover my 100% winner which was a directional butterfly in Amazon. I traded this ticker due to a combination of a technical plus fundamental setup, where I had a solid entry with an edge. In the video, I explain how I used the options chain combined with … Read more

Read More

See You in Las Vegas?

MoneyShow Masters Symposium I’m so excited because I just finished booking my flights to Las Vegas! I wanted to let you know I’ll be heading there to speak at the MoneyShow Masters Symposium August 1st-3rd.  You can find me and some of my favorite experts at the event, including Charles Payne, Jon Najarian, Pete Najarian, … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now
all-as-seen-on-logos