Microsoft Stock Analysis: Price Drops 17% – Is a Rebound Coming?

Microsoft's stock has recently declined by 17% from its all-time high, raising concerns among investors. As of now, Microsoft shares are trading at $386.33, hovering around the 100-day moving average (100MA) of $387.54. This level is a crucial technical indicator that could dictate price movements throughout March.

Key Support and Resistance Levels

• Pre-market trading has already dipped below the 100MA, but a weekly candlestick close below this level would signal further downside potential.
• If Microsoft breaks below $380, a decline towards the $366-$370 range is likely. This zone previously acted as resistance and has now turned into a key support area (marked by the green trendline).

Technical Indicators: Oversold or More Downside Ahead?

• The Stochastic Oscillator and Williams %R indicators suggest that Microsoft stock is in oversold territory. The last two instances of similar oversold conditions (August 2023 and a prior occurrence) resulted in strong price rebounds.
• However, the MACD (Moving Average Convergence Divergence) indicator remains bearish, signaling that downside pressure could persist in the near term. Unlike other indicators, the MACD is not yet oversold based on historical trends, which may weigh on Microsoft’s price action.

What to Watch Next?

Investors should closely monitor how Microsoft stock closes this week in relation to the 100MA. A clear break and close below $387.54 could confirm further downside, while any bullish reversal signals from key indicators could indicate a potential rebound.