Microsoft traded higher yesterday, hitting a new all-time high at $262.44. Then, it continued consolidating below that level for the rest of the session. Overall, the stock remains well above the upside support line drawn from the low of Oct. 30th, and even if it corrects lower, as long as this is the case, we will hold a positive stance.

As we already noted, the stock may slightly pull back, perhaps to test once again Thursday’s low of $255.50. If investors are willing to jump in from that point, we could see a rebound back near the all-time high of $262.44, where a break would take the stock into territories never seen before.

Shifting attention to our short-term oscillators, we see that the RSI, although above 50, shows signs of topping, while the MACD is positive but flat near its trigger line. What’s more, there is negative divergence between both these indicators and the price action. In our view, this increases the chances for the stock to pull back before the next positive leg.

Now, in order to start examining a bigger correction to the downside, we would like to see a dip below $247.00, a support marked by the low of Apr. 7th. This may trigger declines towards the $240.00 zone, which provided resistance on Mar. 16th and 23rd, the break of which could pave the way towards the aforementioned upside line, or the low of Mar. 30th, at $231.00.

 

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