Resistance Turned Support on Microsoft Stock

Resistance Turned Support on Microsoft Stock

Resistance Turned Support on Microsoft Stock

Microsoft stock recently made a strong upside break past a key resistance area at $48 then zoomed up to a high of $57 before showing signs of a pullback. Using the Fib tool on the breakout move shows that the 50% level lines up with the former resistance area and 200 SMA, which has held as support.

This puts Microsoft stock on track to test the previous highs or perhaps even go higher. Stochastic is on the move up, which means that buyers are in control of price action. Also, RSI is pointing up to indicate the presence of bullish pressure.

In addition, the 100 SMA is above the longer-term 200 SMA, confirming that the path of least resistance is to the upside and that the uptrend is likely to continue. However, larger retracement, if it occurs, could still find support at the 61.8% Fib or $46.

Analysts have remarked at the five-year beta of 0.93 for Microsoft stock, making it less volatile compared to other equities and a viable holding even in times of risk aversion. This market behavior has been prevalent lately, given the concerns of a global economic slowdown due to the persistent slump in commodity prices.

Earlier in the month, Microsoft announced that they’ve reached a deal to provide Windows 10 on 4 million devices for the department. Stock prices got a strong boost from the news and this upward momentum might be sustained assuming all goes well with their plans.

In other company developments, Microsoft has began rolling out group video calling features for Skype on iPhone, iPad, and Android devices. The roll out started in North America and Western Europe, with worldwide availability expected to be completed by March. “Now that group video calling is available on all platforms, nobody gets left out,” writes the Skype Team in a blog post. “Whether you’re on a laptop, desktop, mobile or tablet, everyone can be part of the fun without having to plan and schedule – spontaneous get-togethers can just happen, whenever the mood takes you.”


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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.