Most investors would consider that a win with the S&P 500 down more than 1.25% so far on the day. Helping fuel that rebound may be a bullish analyst call.
The stock was upgraded to buy at Jefferies and assigned a $160 price target. The target implies almost 17% upside to the share price, which has already rallied 35% so far this year and 22% in the past 12 months.
Microsoft's performance on both timeframes vastly outperforms the broader market, with the S&P 500 up just 15.75% and 0.5% in the same time, respectively.
Given the stock's consolidation over the past few months, the analyst call may not be as ambitious as the headline makes it appear. Particularly following Barclay's call on Monday that Microsoft would deliver a beat-and-raise earnings result this quarter.
Let's look at the charts to see where this tech giant may be heading next.
Trading Microsoft Stock
When looking at the daily year-to-date chart above, a few developments are clear.
First, Microsoft stock is finding resistance at $140. Second, uptrend support (blue line) gave way earlier this month, while the 100-day moving average supported the share price in back-to-back sessions.
Now below former uptrend support, investors need to see if MSFT stock can reclaim this mark and push through $140 or if lower prices are on the table.
With a setup like this, it's best to take it one level at a time.
Specifically, on the downside the levels are pretty clearly marked. Immediate support is the 100-day moving average, as it proved just last week. Should it fail, it puts the October lows of $133.22 on the table, as well as the 78.6% at $130.87.
Below the 100-day warrants caution, but below the $130 mark is bearish. It puts the 200-day moving average and 61.8% retracement on the table for Microsoft stock.
On the upside, though, MSFT stock first needs to reclaim the 50-day moving average and it would be constructive if it could also reclaim uptrend support. It's possible that if Microsoft continues to chop sideways or lower that uptrend support will "run" away from the stock price.
Whether that happens doesn't matter too much, because $140 remains a very solid level of resistance and the main gatekeeper to higher prices. Above it opens the door to new highs.
So the keep-it-simple takeaway is this: Below the 100-day moving average warrants caution, while a fall below $130 turns the charts more bearish in the short term. Above $140 is bullish.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.