Shares of Microsoft (MSFT) continued their upward trend on Tuesday, marking their seventh consecutive higher close. This surge in stock price follows the company’s announcement of a 10% increase in its quarterly dividend and a $60 billion stock buyback program. Additionally, Microsoft and Blackrock, the world’s largest asset manager, revealed plans to launch a $30 billion artificial intelligence (AI) infrastructure fund, further boosting investor sentiment.
Microsoft’s stock has been steadily climbing since early August, with a brief period of consolidation before resuming its upward trajectory. However, it’s important to note that the recent gains have been accompanied by declining trading volume, indicating a lack of participation from larger market participants. Furthermore, there are indications that the stock may be forming a head and shoulders top, which suggests a potential reversal from a bullish to a bearish trend.
On Tuesday, Microsoft shares closed at $435.15, reflecting a 0.9% increase. Looking ahead, investors should pay attention to key price levels that may influence the stock’s movement.
Resistance levels to watch include $448 and $468. If the shares continue to rise, they may encounter initial resistance around $448, where traders who bought earlier this month may look to exit near a trendline that connects a period of consolidation in June with a minor countertrend peak in July. A move above this level could lead to a retest of the all-time high of $468 set in early July. A breakout beyond this level would invalidate the head and shoulders formation.
On the other hand, support levels to monitor include $410 and $385. If the stock experiences weakness, the $410 area, just below the rising 200-day moving average, may provide support. This level is marked by a horizontal line that connects comparable trading levels from late January to the present. A further decline could bring the stock to around $385, where bulls may look for buying opportunities near the November swing high and August swing low. A breakdown below this level would confirm the head and shoulders formation on Microsoft’s chart.
In conclusion, Microsoft’s stock has been on an upward trajectory, supported by positive news such as the dividend increase and stock buyback program. However, technical analysis suggests the possibility of a trend reversal. Investors should closely monitor the resistance levels at $448 and $468, as well as the support levels at $410 and $385, to gauge the stock’s future direction.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as investment advice. The author does not own any of the securities mentioned.
