MSFT shares are currently stuck in consolidation, trading inside an ascending triangle formation on its 1-hour time frame. Price is testing the top of the triangle at the moment and may be due for either a bounce or a break.
An upside breakout past the triangle resistance at $44/share could spur a move up to the nearby area of interest around $48/share. On the other hand, a downside break could lead to a selloff until the previous lows at $40/share.
Stochastic is already nearing the overbought zone, which suggests that selling pressure might build up. RSI is on the move up but is also close to overbought levels, confirming that downside momentum might be seen. The 100 SMA is below the 200 SMA as well.
MSFT Shares Outlook
The company is currently facing legal battles when it comes to having the US government access customer emails stored in its data centers. In December 2013, the company received a search warrant from the U.S. Department of Justice that requested access to emails stored on servers in a data center in Ireland. However, Microsoft argued that the Irish data center was subject to Irish laws.
Courts are expected to reach a decision in the coming months but the arguments are set to air this week. Indications that the ruling might favor Microsoft could mean gains for MSFT shares while a weak argument from the company could spur losses.
On a more positive note, new releases from the company are providing a bit of support for MSFT shares, as Microsoft unveiled new capabilities it will deliver later this year with Microsoft Dynamics CRM 2016, the latest release of its customer engagement solution. In addition, company shares advanced on news of a potential acquisition of sraeli cybersecurity firm Adallom.
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