Microsoft stock has been in focus amid tech-stock momentum and as the software giant continues with its AI advancements.
Shares of Microsoft (MSFT) – Get Free Report have been on fire lately, as money continues to flow into tech and as artificial intelligence — AI — remains at the forefront of investors’ attention.
Shortly after ChatGPT exploded onto the scene, Microsoft made a multibillion-dollar investment in its parent, OpenAi.
Not too long after that, Microsoft showed off how it’s using AI in its search engine, internet browser and products.
The showcasing of Microsoft’s AI advances have come at Alphabet’s (GOOGL) – Get Free Report (GOOG) – Get Free Report expense, particularly as the latter highlighted its own AI initiatives and accidentally showed off a clear mistake in its AI-based findings.
Also helping Microsoft stock? The year-to-date rise in tech stocks.
Investors shrugged off disappointing earnings from FAANG, while stocks like Tesla (TSLA) – Get Free Report and Nvidia (NVDA) – Get Free Report have been helping power the sector higher.
With all that in mind, let’s look at Microsoft stock, the second-largest U.S. stock by market capitalization.
Trading Microsoft Stock
Daily chart of Microsoft stock.
Chart courtesy of TrendSpider.com
On Wednesday, MSFT shares rallied up to the 78.6% retracement, up 3.4% at the time, before reversing and finishing lower on the day. The shares also had a disappointing session on Thursday as the rally looked to be a bit extended.
Bulls with strong conviction will look for active support in the $257.50 to $260 area. That’s where Microsoft stock finds the 10-day and 10-month moving averages.
Currently, the shares are struggling to regain the fourth-quarter high near $264. Regardless of where support comes into play, this level will be key on any bounces in the short term.
Back above this measure and $275 to $277 is back in play. If it can’t be regained, it may serve as a hint for traders to use a bit of caution.
If support does not come into play between $258 and $260, attention will shift down to the 50% retracement and 200-day moving average in the mid-$250s. By then, the 21-day moving average may climb to that area as well, giving bulls another potential support level.
Below these measures and traders may want to take a pause and reassess Microsoft stock.
A move into the low-$240s could be in play in that scenario, but below that and the stock becomes more vulnerable to a deeper dip.
Here’s the bottom line: Microsoft stock is looking a bit tired, but the trend remains bullish. Look for support around $260, then $255. On the upside, the shares need to regain $264 to continue higher.
