Asset Watch
Tuesday, September 20 2022
The S&P 500 declined by 0.72% on Sep. 16, while Microsoft only declined by 0.26%. Microsoft’s intraday low on Sep. 16 was $242.06, which is near the June low ($241.51) and the March 2021 high ($241.05). Likewise, the May 2021 low ($238.07) isn’t far behind. Therefore, with Microsoft closing the Sep. 16 session at $244.74, the computing giant could be near an inflexion point.
Additionally, Microsoft’s daily RSI hit 29.77 on Sep. 6 – its second lowest level in 2022. But even though the stock has closed at lower lows in recent days, its RSI has not. As a result, the positive RSI divergence highlights how the current selling pressure has been less intense than in the prior episode. Furthermore, a diverging RSI is often a precursor to a reversal.
So, will Microsoft reward the bulls over the next few weeks? Or is it better to proceed with caution until the weak September seasonal period ends?
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