Microsoft The Bellwether?  

As MSFT comfortably pulls away from taking over the world’s largest market cap play from AAPL, one should look for clues from this lone $3T behemoth. It is now the largest holding in the XLK, but itself and Apple still account for more than 40% of the fund. AAPL is not looking like it wants to follow through higher out of the bullish morning star pattern we spoke about last week. Last Friday’s session was certainly suspect as the candle intraday looked strong but CLOSED meagerly and recorded a bullish inverted hammer. Three of the four days this week have filled in the upside gap from 3/4 and backed off. As AAPL now trades 13% off its most recent 52-week highs, MSFT has stayed in close proximity to all-time highs. Since breaking above the very round 400 number on 1/24 it has CLOSED above it except for 1/31. Today could be important as it broke above a cup base pivot of 420.14 and finished just off intraday highs. Remember the best breakouts tend to work right away so any stalling action here or failure to put some distance between itself and the breakout trigger would be interpreted in a bearish fashion. If this can finish Friday on a sanguine note that would have bears sleeping uneasy over the weekend.

This article requires a Chartsmarter membership. Please click here to join.