In a post dated April 24th, 2022, we wrote that Microsoft (MSFT) breached its long term support lines. However, despite recent market conditions, Microsoft’s stock ‘hung around’ and didn’t fall off a cliff. At this point, it seems as the support lines acted like an armor and provided tolerance: they cracked, but did so while absorbing the majority of the energy and passing on minor hit impact.
As mentioned a few times along these posts, support lines should be seen as an area rather than a specific number carved in stone.
Here is how today’s chart looks like, overlaid by the breached support lines:
A zoom in view better shows the tolerance area these lines provide:
Here’s today’s chart with the updated support lines:
Zooming in:
The current best respected support lines, detailed here below, registered on the same date in 2016 as the ones that got breached:
- The 398-day SMA as body support
- The 400-day SMA as wick support
Hanging around its long term support lines/area may resolve to either side; we’ll keep monitoring MSFT’s price action and further developments. Stay tuned.