The opposite of that pattern, a regular head-and-shoulders, is forming in shares of Microsoft (MSFT - Get Report) right now. To say that the pattern is forming is a bit of an understatement -- Microsoft's head-and-shoulders top has been in formation since way back in November when the left shoulder came together. But despite the time it's taken for the pattern to complete, the implications are still there for shares.
As with the Ford pattern, the trigger for Microsoft comes on a break of the neckline. Unlike with Ford, Microsoft's pattern has bearish implications. That's because a head-and-shoulders top depicts exhaustion among buyers, who no longer have the conviction (or the capital) to continue buying. Without that requisite buying shares fall (even moreso when shorting comes into play).
Watch for jerkiness in Microsoft's right shoulder -- we'll want to see a clean, confirmed break below the neckline before this trade becomes shortable.Microsoft, one of the top-yielding computer software and services stocks, shows up on a recent list of 3 Big Tech Winners in China.