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.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.