Will Microsoft Continue its Prevailing Uptrend?

Microsoft Corp. (NASDAQ: MSFT) traded north on Wednesday and Thursday, after it hit support at239.10. On the 4-hour chart, the share looks to be forming a short-term double bottom formation, trading still above the upside support line drawn from the low of October 30^th. With all these technical signs in mind, we would consider the near-term outlook to be cautiously positive.

A clear break above last Friday’s peak of 249.15 may confirm the completion of the double bottom and perhaps open the way towards the 254.25 level, which provided resistance on May 3^rd and 7^th. If that barrier is not able to halt the advance this time around, we may then see investors aiming for the stock’s record peak of 263.35, hit on April 27^th. If that level is broken as well, then investors will place Microsoft into uncharted territory.

Turning our gaze to the short-term oscillators, we see that the RSI jumped above 50, but it has just ticked somewhat down, while the MACD is negative, but above its trigger line, pointing up. It looks to be headed towards zero. Both indicators suggest that the stock may start gaining upside speed soon, but the fact that the RSI ticked down make us careful that another setback may be in the works before the next leg north.

Nonetheless, in order to discard the bullish scenario, we would like to see the stock falling below 230.90, a support marked by the low of March 30^th. This will also place the price below the aforementioned upside line and may trigger declines towards the 224.20 or the 220.35 zones, marked by the low of March 4^th and the inside swing high of January 8^th respectively. If neither area is able to halt the decline, then Microsoft could slide towards the 212.20 territory, which supported the price action on January 6^th and 15^th.