Tech relief rally hits a Fed brick wall — fade the Microsoft bounce
Thesis
Dip buyers are stepping in as US-Iran tensions fade, but the structural risk remains intact. Citadel Securities is explicitly warning that the new Fed chair is determined to fight inflation, which will act as a major drag on risk assets like tech stocks. Microsoft is currently suffering its worst month since the dot-com crash in 2000. While the geopolitical de-escalation provides a short-term window for a relief bounce, the macroeconomic headwinds mean any rally is likely fragile and short-lived.
Strategy approach
Build a mean-reversion strategy that enters long MSFT on D1 after 3 consecutive lower daily closes when the 14-day RSI drops below 40, targeting a 5-8% bounce. Exit immediately if the broader QQQ index fails to close above its 10-day simple moving average.