The Microsoft Corp. stock (NYSE: MSFT) traded slightly lower in the second half of this week, after hitting resistance slightly below 218.00 on Wednesday. Overall, in the short run, the stock is trading within a narrow range, between that resistance obstacle, and the support zone of 210.00, and thus, we would take a neutral stance for now.
In order to start examining the upside again, we would like to see a decisive close above 218.00. This would signal the upside exit out of the aforementioned range and may set the stage for advances towards the peak of November 9th, at 228.15. If that barrier is not able to halt the uprise this time around, its break may encourage the bulls to target the stock’s all-time high, at 232.86, hit on September 2nd.
Looking at our short-term oscillators, we see that the RSI turned down and just touched its toe below its 50 line, while the MACD lies fractionally above zero and slightly below its trigger line. The proximity of those indicators to their equilibrium lines suggests a lack of directional momentum and supports our view to stay sidelined until Microsoft exits its short-term range.
We will start considering a negative outlook if we see a break below the lower bound of the range, at 210.00, or even better, a dip below the low of November 23rd, at 208.00. Such a move would confirm a forthcoming lower low on the 4-horu chart and may see scope for declines towards the 199.50 zone, defined as a support by the low of October 30th. Slightly lower lies another key support area which could get tested and that’s the 196.25 zone, marked by the lows of September 18th and 21st.
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