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Microsoft Corp. - (MSFT) - March 16, 2023

Software giant Microsoft’s (MSFT) relative strength has improved significantly in the last two months. Starting in the red zone, Microsoft has steadily climbed back up the rankings in the SIA S&P 100 Index Report, recently returning to the Green Favored Zone for the first time since January of 2022. Currently, Microsoft sits in 16th place, up 10 spots on the day and up 26 positions in the last month.

After bottoming out in the $210-$220 range over the last quarter of 2022, Microsoft (MSFT) shares appear to have started recovering to start 2023. In recent weeks, the shares have established support at a higher low near $240 and have retaken both their 50 and 200-day moving averages with a golden cross pending. This week, the shares have started to climb again on increasing volume, a sign of growing investor interest.

Currently, the shares are bumping up against downtrend and round number resistance in the $270-$275 area. If they can push through there, they would complete an ascending triangle base, snap out of a long-term downtrend, and signal the start of a new uptrend. Should that occur, initial resistance may appear near the $300 round number, followed by a previous high near $315 and a measured $330 on trend. Initial support appears at $250 where a round number and the 200-day average converge.

A potentially significant technical test appears to be underway in Microsoft (MSFT) shares. Since peaking in January of 2022, Microsoft has been under distribution, steadily declining in a downtrend of lower highs. Since bottoming out in October, however, the shares have been under renewed accumulation, establishing an uptrend of higher lows. ‘ Currently, Microsoft is bumping up against its downtrend resistance line near $268.10. A close above that level would snap the downtrend and signal the start of a new uptrend. Should that occur, next potential resistance may appear at a previous column high near $295.95, the $300.00 round number, or $314.10, where vertical and horizontal counts cluster with previous column highs. A failure and downturn from here, however, would indicate that the larger downtrend remains intact with potential support near $242.80 where an uptrend line and a 3-box reversal converge.

With its bullish SMAX score increasing to 8, MSFT is exhibiting strength against the asset classes.

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