:max_bytes(150000):strip_icc()/MSFTChart-22d597b53c204bfa82ff6f91e7dff7b2.gif "Watch These Microsoft Stock Price Levels After Major Cloud Services Outage")
:max_bytes(150000):strip_icc():format(jpeg)/MSFTChart-22d597b53c204bfa82ff6f91e7dff7b2.gif)
Key Takeaways
- Microsoft shares lost ground in premarket trading Friday after the tech giant suffered a major cloud services outage, linked to a system update by cybersecurity software firm CrowdStrike, that affected banks, airlines, media outlets, and companies around the globe.
- Microsoft shares continue to undergo a retracement after recording a record high earlier this month.
- The Microsoft share price could find support at key chart levels including $430, $410, $385, and $367.
- A bars pattern, which extracts the trending move from June to early July and applies it to the $430 support level, forecasts an upside price target of around $490.
Microsoft (MSFT) shares fell in premarket trading on Friday after the tech giant suffered a major cloud services outage, linked to an system update by cybersecurity software firm CrowdStrike (CRWD), that affected banks, airlines, media outlets and companies around the globe.
Below, we’ll take a closer look at Microsoft’s chart and turn to technical analysis to identify important levels that may come into play in upcoming trading sessions.
Shares Undergo Retracement
Microsoft shares have remained in a long-term uptrend since the 50-day moving average (MA) crossed above the 200-day MA in March last year to generate a golden cross buy signal.
However, after climbing to a record high earlier this month, the shares have undergone a retracement of around 6% as investors book gains, potentially rotating some of the profits into small-cap stocks.
Watch These Key Price Levels if Selling Continues
If the selling continues, investors should watch four key areas where Microsoft shares may find support.
An initial area to keep an eye on sits just below the current price and 50-day MA around $430, a location that may attract buying interest near several price peaks that formed on the chart between March and May.
A move below this level could see the shares test the $410 level, where they may encounter support from a horizontal line cutting through a range of similar prices from January to May.
Further selling may spark a fall to the $385 area, where the stock could attract a flurry of buy orders around the November 2023 swing high.
Finally, a deeper pullback in Microsoft shares could see the price revisit $367 near a lower trendline connecting the July 2023 swing high and a period of narrow consolidation between December 2023 and January this year.
Monitor This Key Price Target if Uptrend Resumes
If Microsoft shares find support around the $430 area and the uptrend resumes, investors can use a bars pattern to forecast a possible price target. To do this, we extract the trending move from June to early July and apply it to the first horizontal line on the chart. Doing so predicts a target of around $490.
Microsoft shares were down 1.4% at $434.40 about two hours before Friday’s opening bell.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.