Market Analysis

Is Microsoft ready for a breather?

Since our last look at the Microsoft share on April 25 (Link: a lot has happened. The stock showed one all-time high after another and pushed through the resistance at US$137.60 yesterday, Monday, marking a new all-time high.

The question now is whether the bulls can drive the stock even higher, or whether there will be a correction?

Fundamentally, the stock doesn’t seem overvalued. The share has risen by 35 percent since the beginning of the year, but the workflow products seem to be doing just as well as Microsoft’s positioning in the cloud gaming sector.

Likewise, in contrast to other companies such as Facebook or the Google mother Alphabet, Apple or Amazon, Microsoft does not seem to be involved in antitrust and privacy-related scrutiny or facing investigations – at least not yet.

From a chart technical point of view, the upward trend is intact. The stock was able to rise back above its upward trend line. Nevertheless, the last candles are rather unmotivated. The candle bodies are rather small with pronounced wicks. This could indicate uncertainty in the market.

To continue its rise, the market must overcome the new all-time high in the US$138.30 zone. The market would then again enter uncharted territory. The next resistance could then be US$141.40. If the market also overcomes this zone, then another resistance could wait at US$146.95.

However, if the market pushes down from the new all-time high, then first support could be at around US$133.40. If the bears then drive the market further down, the US$128.00 and US$121.40 zones could also support the market.

The MACD oscillator is in positive territory and already showed a bullish crossing on the 7th. The histogram, on the other hand, is somewhat subdued, despite the new high.


MSFT.US - daily chart. Source: ActivTrader

MSFT.US Daily Chart | Source: ActivTrader


Written by Daniel Schuetz, External Analyst, ActivTrades

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