MACD Flips Bearish: Short Setups On Microsoft, Bitcoin And ARM

This is the trading playbook where the charts do the talking and every session makes you a better trader. Hello everyone and happy Sunday. My name is Lawton Ho here with Verified Investing and welcome to the trading playbook. Um, if you are new here, I give you three actionable trade setups every Sunday based on a technical analysis concept I cover every single Saturday. So, that means if you haven't seen yesterday's episode, make sure to click off of this, but make sure to come back and watch yesterday's episode and then come back. I'd also ask you guys to like this video, subscribe to the Verified Investing YouTube channel and leave a comment down below. Honestly, guys, this is how I find out what you want me to cover. I chose MACD this week because of your comments. So, make sure to leave those comments down below to continue to support all of the work we're doing here. And finally, I want to thank our sponsor Kashi uh for sponsoring us. You can scan this QR code to learn more, but we'll talk a little bit more about that at the end of the episode. With that being said, let's talk a little bit about this week's plays. And today we're talking about MACD. Now, for the purposes of this show, right, um generally I don't recover things that we talk about on Saturday on Sunday, but just so you're not left in the dark, in case you didn't watch yesterday's episode, which you definitely should, I'm going to cover up the basics. Basically, MACD is an indicator we put on TradingView. You can just type in MACD and it's the moving average convergence divergence, right? I explained the formula and everything yesterday, but what you really need to know is that once it's on your chart, it's signal with these lines here. The blue line being MACD, the orange line being uh the signal line. And what's important is when blue goes above orange, the stock goes higher. And when they flip, that means the stock is favored to go lower. So, that's how I'm going to determine some of our plays for this week. With that being said, let's talk about plan A. So, Microsoft actually broke to the upside. And if you look at the MACD, the MACD crossed above the signal line despite the stock not hitting all-time highs. Now, the stock is currently on Microsoft still about 4% till all-time highs, but this is my play this week. I am watching the MACD. Should this blue line come below and actually close on a daily basis below this orange line, I will initiate a short on Microsoft. Instead of trying to ride the momentum up, I'm going to look to short it when that MACD flips bearish. All right? You could also continue to ride the wave if you just want to go long, but it's difficult for me looking at a chart like this to continue to go long when it's so far up in the charts. You're talking about a move since basically June. A move of 53% guys. 53%. And we're going to talk a little bit about crypto, look to diversify, and this is plan B, Bitcoin. So now, taking a look at Bitcoin, I want you to go ahead and pause the video. Figure out what my play is based on what you know about MACD. Now that you've had a chance to do that, we can see that in the past couple days, finally after tons of playing around this area, MACD has flipped well below its signal and signal line favoring actually a move lower. So my move on Bitcoin is a short on Bitcoin, right? Additionally, what I love about this and it's so important, guys. I talk about this all the time, putting all the pieces together. So yes, absolutely each episode standalone episode is great, but it's when you layer them together to create a multi-factor trade is where you get the best results. So for me on Bitcoin, what type of pattern is this starting to form? Of course, a beautiful head and shoulders pattern. Obviously, that right shoulder hasn't been made yet, but I believe that this does favor a move lower. So because of this MACD flipping below the um signal line, I'm going to look to short Bitcoin basically here, right? Looking for a move lower. Now your invalidation would likely be a close above the signal line on on the MACD, but that gives you some clear parameters. And this is one of my favorite things about MACD, it gives you some clear parameters of what to look for when you are trading using this signal. Now finally, plan C, we're talking about a r m. And can you guess what this is, whether it's a long or a short? You can see on this huge move up, this move up over 40% MACD stayed above, right? Stayed above and remained above the signal line. But what just happened? We recently broke, closed below, and are heading down MACD versus the signal line. So, for me, plan C is an additional short here on ARM. And if you're taking a look at the chart, we're seeing a couple up-sloping trend lines begin to break. And on a larger time frame, taking a look at potentially massive head and shoulders pattern forming here on ARM Holdings. So, for me, I absolutely love ARM for a short. Of course, a stop out would be a close above the signal line here on the MACD versus the signal line. All right, guys. Again, that was the three trade setups. And now, I want to thank our sponsor, Kalshi, trade what's next. Now, this is super cool, guys. Um you guys know that I'm a professional trader, but that doesn't mean I want to own every single asset that I have an opinion on. And that's why I use our sponsor, Kalshi, where you can trade contacts contracts of all different markets. You have sports, politics, and even financial markets. Now, Kalshi has implemented and brought in perpetual futures, including 24/7 gold and silver perps. 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Again, guys, please like this video, subscribe to the Verified Investing YouTube channel, and leave a comment below on what you want us to cover next. I hope you guys have a great rest of your day, and I'll see you guys next time. Bye-bye. >> That's the Trading Playbook. Today's episode was your film study, the principle, the pattern, the framework. The application is waiting for you on Sunday. Real setups, real levels, ready before Monday opens. Subscribe to Verified Investing on YouTube. Saturday teaches, Sunday prepares, show up ready.