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Here's How Microsoft Can Rally to All-Time Highs

Microsoft is pushing higher as the stock rotates to multi-week highs. Is the pattern setting up for another run at all-time highs? Let's look.

Tech stocks have not had an easy run lately. However, Microsoft  (MSFT) - Get Microsoft Corporation Report and many other mega-cap holdings have been holding up pretty well.

Largely speaking, Microsoft, Apple  (AAPL) - Get Apple Inc. Report, Amazon  (AMZN) - Get Inc. Report and other FAANG and large tech companies surged into the end of summer and topped out in early September.

Most of these stocks have been consolidating, although some have made new highs. However, Microsoft has been slowly but surely grinding its way higher.

Shares broke out in late January on better-than-expected earnings, then ran to all-time highs ahead of earnings in April.

We’ve seen a post-earnings dip in the stock since and selling pressure in high-growth tech stocks hasn’t helped sentiment.

Still, we’re seeing some positive developments on the chart for Microsoft. Can it run to all-time highs?

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Trading Microsoft

Daily chart of Microsoft stock.

Daily chart of Microsoft stock.

The stock has traded quite technically so far over the past year. After a sharp selloff in March 2020, the stock rather quickly rallied to the 161.8% extension, which acted as resistance until January.

Once Microsoft broke out over this level, it became support. That’s a healthy bullish development.

I also like the way that $240 and the 21-week moving average acted as support over the last two weeks. While the 21-week has generally been support, $240 was recent resistance, after the stock gapped below this measure earlier in the year.

This is another healthy bullish development.

Now rotating back over the last two weeks’ highs and the 10-week moving average, Microsoft bulls are looking for a charge higher. Specifically, they are setting their sights on the all-time high near $263.

If we can get a push through this level, it could open up the 261.8% extension near $285. That would be a great intermediate-term price target for this stock.

On the downside, bulls don’t want to see Microsoft stock lose the 21-week moving average. If it does, the 10-month and 50-week moving averages could be in play, but in order to get there it will likely require a larger market-wide correction.