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An investor can make technical analysis as simple or complicated as they want. However, when making it too complicated it can lead to “paralysis analysis.” This technician favors keeping it as simple as possible and one of the main tenets of my analysis is double and or triple tops or bottoms. The beauty is if they fall, a loss can be limited, and or a momentum trade can be initiated.

The S&P 500 index delivered one up on a silver platter on Wednesday and the rest is history. The choppy and erratic trading in the premarket and into the regular session was put to an end when the index bottomed only a few points from Tuesday’s low (4425.25) at 4527.50 and embarked on a major rally.

Once the premarket high of 4448.50 was breached, the pace of the rally accelerated. It should be noted that the upward momentum stalled a few points away from Tuesday’s high (4479.50) and a few more points from Monday’s high (4483.50), dare I say a triple-top.

A mild round of profit-taking took the issue off the high for the day. For the session, the index added 37 handles to close at 4471.75.

There was no surprise on the leader of the rally, Microsoft Corp (NASDAQ: MSFT) as the company both increased its dividend and initiated a $60B share repurchase program. Although it failed to make a new all-time high, it did post a new all-time closing high gaining $5.03 or 1.6 percent to close at $304.82. That doubled the index’s gain of 0.85%.

The lone loser of the top components was Facebook Inc. (NASDAQ: FB), which declined $2.61 or 0.62 percent to close at $273.92.


PreMarket Prep Stock Of The Day: Microsoft Corp (NASDAQ: MSFT)

Knocking on the door for a new all-time high. Read more on MSFT here.