The price action in Microsoft (MSFT) - Get Report has been quite volatile since the LinkedIn announcement.

The stock began the week with a huge downside gap as investors aggressively sold shares on the takeover news. Microsoft retested its April/May lows during Monday's early-going before rebounding nicely into the close.

The stock finished with a 2.6% loss on its second heaviest downside trade of the year. This huge negative momentum swing will likely drive shares lower in the near term.

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Yesterday, Microsoft held in a very tight range as volume again remained fairly heavy. The stock did end Tuesday's session with a slight loss as its June struggles continue. Microsoft has lost ground every day but one so far this month. With layers of heavy supply now overhead and moving average pressure building, patient investors should expect more downside before the stock can regain its footing. This process will soon develop into a very low-risk buying opportunity as a retest of the 2016 lows plays out.

At Tuesday's close, Microsoft was still holding up well near the April and May lows near $49.40. If this area gives way, a drop down to the major support zone that held the February low is likely. Microsoft bulls should consider the stock a very low-risk buy as it nears the $48.50 area. The stock's February low is just below at $48.20. A fresh base in this area, along with a divergent low in the moving average convergence/divergence indicator, would set the stage for a new rally leg. On the downside, a close below the $47 area would be a clear signal that a much more prolonged bottoming process will be needed before Microsoft can return to rally mode.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long MSFT.