Technical Analysis – Microsoft stock takes a step back; bullish picture intact

Anthony Charalambous, XM Investment Research Desk

Microsoft stock turned down from the fresh all-time high of 168.11 but its pullback seems to have stalled around the inside swing high of 160.60, where buyers have driven the price back up again. The pause in the market is also reflected in the Ichimoku lines – which have flattened – and the conflicting signals from the short-term oscillators.

The MACD deep in the positive region has slipped below its red trigger line, while the RSI, ahead of its neutral mark, pivoted and is now rising. That said, all the upward sloping simple moving averages (SMAs) increase the odds for further advances.

If buyers continue to drive the stock higher, initial pressure could come from the top of 168.11 ahead of the 170.00 obstacle. Overcoming this, the ascent could move to test the 175.00 round number and 176.75 barrier overhead, which is the 423.6% Fibonacci extension of the down leg from 141.61 to 130.73.

To the downside, if sellers reemerge and steer below the 20-day SMA and 160.60 support, the drop could rest at the low of 156.37, where the 50-day SMA also resides. Pushing lower, the Ichimoku cloud and the 152.34 hurdle could halt the bears from reaching the 100-day SMA hovering above the trough of 147.06.

Overall, the picture in the short-term remains bullish if the stock holds above the 147.06 level.