Technical Analysis – Microsoft stock maintains bullish outlook below record high

Melina Deltas, XM Investment Research Desk

Microsoft’s stock price is trading not too far from the new record high of 189.50 on Tuesday, having pulled back slightly. But momentum indicators suggest that a possible downside correction may be on the cards.

In regard to the technical oscillators, the near-term bias is looking neutral-to-bearish as the RSI is flatlining at the 70 level, while the stochastics are pointing south and the %K and %D lines are negatively aligned.

Should the price make another run higher, it’s likely to meet resistance at the all-time high of 189.50. A successful break above this key resistance area would open the way for the next psychological barrier of 200.00.

If the marginal pickup fails to hold and prices turn lower, the red Tenkan-sen line at 182.75 is the nearest support that could halt steeper declines ahead of the 181.80 mark. A potential support, though, is the 168.10 level near the 23.6% Fibonacci retracement level of the up leg from 94.50 to 189.50 of 167.17.

The bullish picture also holds true for the long-term outlook as the pair has been trading higher, following the bullish tendency over the last year. Price action at the moment is above the Ichimoku cloud so the risks are to the upside.