Markets took a hit Tuesday, although finishing somewhat off their morning lows of better than 2%. Earnings were in focus and the Nasdaq took the biggest thumping off by 1.9%. Certainly aiding the decline was MSFT which drooped 9.4% undercutting its 200 day SMA for the first time in almost 2 years. Keep in mind MSFT makes up more than 4% of the tech rich index as its the second largest component. Interesting to see some recent bifurcation in the top performing alcohol/tobacco group with PM now off 11% from recent 52 week highs. Notice how the round numbers came into play as the stock had the look of a nice 91.73 cup base trigger (which is now a double bottom trigger dating back to the week ending 6/20/14), but the 90 figure on 11/5/14 was interruptive. The stock then proceeded to bounce off the round 80 handle on 1/5 and met with 200 day SMA resistance last week. A further look back on the weekly chart shows just how important the 80 figure was since a break above an 80.06 cup base pivot point the week ending 2/10/12. The level held between this February and April with a brief “cough” below in late January. It now looks poised to move back to that number and should that not hold could be trouble. Contrast the action with peers MO RAI and VGR all trading right at 52 week highs and PM looks vulnerable. It does sport an attractive dividend yield near 5% and a move to 80 would correspond with an oversold 30 RSI handle, so you dividend players have your bids ready.
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