Microsoft has been heating up from a momentum standpoint in the last few months, as shares rallied more than 14% from April's lows to today. But despite the recent upside, Microsoft is starting to show some cracks this summer. Recently, shares have been forming a descending triangle pattern with a breakdown level at $45.50.
Put simply, if that $45.50 level gets violated, then Microsoft could see a pretty significant price setback. On the flip side, a breakout above $47 clears the way to a re-test of 2015 highs.
Either way, it's critical to wait for the move to happen, then react.
For another take on Microsoft, check out "Microsoft Stock Chart Points to a Rally Around the Corner."