Microsoft shares are trending lower on the 1-hour time frame, as a short-term descending channel can be drawn to connect the latest highs and lows. Price recently tested the top of the range near the $47/share area and is on its way down.
The 100 SMA is below the 200 SMA, confirming that the selloff is likely to carry on. However, stochastic is already in the oversold area, which means that sellers might already be exhausted. RSI is still on the move down, though, indicating that there’s enough selling pressure left for a move towards the channel support around $44/share.
Microsoft Shares Outlook
The company is nearing the launch of Windows 10 in July and investors are keen to see whether this could keep revenues and profits supported. Windows 8 wasn’t as successful as its predecessors, which means that there is a bit of doubt that the next launch would be impressive.
Genuine Windows 7 and Windows 8 users will get Windows 10 for free, although they would need to upgrade within 12 months of Windows 10′s release in July to qualify for this. However, Windows Vista and Windows XP users would need to buy a full copy, with Windows 10 Home starting at $119.
Rumors leading up to the launch could push prices of Microsoft shares around, with downbeat expectations likely to keep the downtrend intact. A promising product, on the other hand, could lead an upside break from the short-term channel and further gains for Microsoft shares.
A rally could lead to a move up to the previous highs near $49-50/share while further bearish momentum could push for a break below the channel support. Zooming out to longer-term time frames reveals that Microsoft shares are currently finding resistance near the previous year highs and may form a long-term double top reversal chart pattern if the selloff resumes.
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