Shares of Microsoft  (MSFT) - Get Report came close to making new all-time highs on Tuesday, but just couldn’t get there.

The stock is now just below flat for the session, despite receiving a new Wall Street-high price target from the analyst community.

Microsoft stock - and the other stock in the $1 trillion market cap club, Apple  (AAPL) - Get Report -- remain red hot. Both made new highs on Monday and have made that feat somewhat routine over the past month. For Microsoft specifically, the stock has rallied about 53% on the year.

That’s why some investors may be surprised to see that MSFT stock is not making new highs on Tuesday after Wedbush analysts raised their price target to $185 from $170.

The target implies roughly 20% upside from current levels, which if achieved, would give Microsoft a market cap of about $1.44 trillion. Let’s take a closer look at the charts to see if this feat is even possible.

Microsoft and Apple are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

Trading Microsoft Stock

Daily chart of Microsoft stock.

Daily chart of Microsoft stock.

Above is a daily chart of Microsoft stock, and a beautiful one at that.

The stock erupted from its fourth-quarter slump, rallying from about $100 at the end of 2018 to $140 in July. Admittedly, almost every stock came into 2019 under suffocating pressure as the market was decimated. Still, the rally was impressive in many investors' eyes. 

However, after a 40% rally into summer, Microsoft stock found itself in the doldrums. Shares continued to grind higher, putting in higher low after higher low, all while failing to break out over $140. This went on for three to four months, before the stock finally gapped higher in late-October.

It’s been off to the races since, while investors face the inevitable question of what now.

I am a bit surprised that Microsoft is not higher after such a bullish analyst call. But with shares flirting with an overbought condition as it is, it’s healthiest that we see MSFT stock cool off a bit.

Remember, when stocks are too hot it can lead to volatile moves in both directions. Slow and steady is the preference here.

A dip down to channel support (blue line) and/or the 20-day moving average would be a healthy buy-the-dip zone for active bulls. Below this area and the 50-day moving average is on the table, although it hasn’t been the strongest level of support in 2019.

I’m not sure what would trigger such a correction, but should Microsoft stock fall to $140, this is a vital level of support that bulls need to see hold.

On the upside, a move over the current high at $155.90 could trigger a larger rally up to $160.

That’s the setup, for now. Buy the dip into support or look for a breakout over $155.90. Wedbush’s $185 target may be possible in 2020, but we still have a while before it’s in play.