Technical Update - Microsoft set to test key support at open. Reversal of uptrend in the cards
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Microsoft (MSFT) is indicated to open lower around $234.50. That is back to the low just before the share price broke the short-term upper trend line in the falling channel. If Microsoft closes below that level and back below the falling trendline key support at 219 is likely to be tested.
Daily RSI is set to be rejected at 60 and if it drops back below 40 the negative sentiment has been resumed.
Overall picture is bearish, 55, 100 and 200 MSA’s are all dropping. To reverse this bearish picture Microsoft needs to close above 251. That could lead to a move to around 267-278 and test of the 200 SMA.
Medium-term MSFT has been trading in a wide falling channel bouncing a few Dollars from the 0.618 retracement of the 2020-2021 uptrend, 200 weekly SMA and support at around 213.75. However, weekly RSI is still negative with no divergence and could be rejected its falling trendline. If RSI closes back below 40 new lows in MSFT share price is likely.
To reverse this bearish scenario MSFT needs to close above 294.20. First indications of this scenario to play out would be a close above the upper falling trendline
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