Oct 16, 2026 · Weekly issue

Before the Breakout: Microsoft Corporation (MSFT)

Picked by a fixed rule: the open setup with the highest score among US stocks with a market cap above $5 billion and average daily dollar volume above $50 million. Setup grade: B (reasonable technical structure), score 72/100.

Trend

Uptrend

RSI (14)

65

ATR (14)

11.44

Distance from moving averages: 20-day +4.05% · 50-day +6.87% · 150-day +23.87% · 200-day +24.35%

Nearest support: 539.14 (tested 2x)

Nearest Fibonacci level: 0.236 (499.53)

Consolidation below resistance bullish · confidence 60%

Breakout level

541.15

Technical target

604.75

Invalidation (ATR)

515.41

Reward-to-risk ratio: 2.5

Historically, the consolidation below resistance setup reached its target 0% of the time (10 decided signals), according to our public signal tracker.

The structure on the chart

Microsoft Corporation (MSFT) was trading around $539.44 at the time of this issue, about 0.3% below a resistance zone near $540. The pattern the engine identified: consolidation below resistance.

Trend and momentum

The daily trend is up. Price was above all four moving averages we track (20, 50, 150 and 200 days). RSI at 65 was not at an extreme, which leaves room to move.

Volume and liquidity

The stock has an average daily dollar volume of about $12 billion and a market cap of about $4.0 trillion, liquid enough that even larger orders face a negligible bid-ask spread.

What would confirm a breakout

A daily close above the $540 zone on above-average volume, followed by a retest of the level from above that holds. An intraday pop that closes back below the level is not a breakout.

What would cancel the setup

A daily close below the low of the consolidation, a low-volume breakout that fails to hold for two days, or the broad market slipping below its 200-day average. If that happens, the setup is simply off.

The setup updates in the app with every candle, including the hourly trigger, the live score and the pattern's track record. See the full setup on the chart, no sign-up needed

What happened to last week's pick

ConocoPhillips (COP): not triggered yet: the breakout level has not been reached, so the setup is still open. Read that issue.

The newsletter's track record

So far the newsletter has picked 5 stocks: 0 reached the target, 3 were stopped out, 0 expired, 0 never broke out, and 2 are still open.

Each pick is logged as a signal and resolved by the candles that follow, like every other signal in the signal log. This is a setup, not a forecast: in our record about a quarter of setups never break out at all, and fewer than half of those that do reach their target.

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