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February 28, 2006
Microsoft Leads Nasdaq Bounce
The Nasdaq caught a bid yesterday and Software stocks led the way higher. MSFT still has a $279 billion market cap and is plenty big enough to move the Software HOLDRS (SWH), Nasdaq and Nasdaq 100. The stock broke triangle resistance yesterday, but volume was low. This is a negative, but the breakout is positive until proven otherwise. I will be watching yesterday’s gap and the February lows for a complete failure. A break below 26 would be bearish for the stock, software and the Nasdaq. You can also see that the pattern over the last two months looks like a head-and-shoulders. It is out of place for such a reversal pattern, but a break below 26 would be bearish all the same.
Posted by Arthur B. Hill at February 28, 2006 06:40 AM