Critical Support Zone for Microsoft

Microsoft has been underperforming the broader market, including the S&P 500, since July. The trouble began with a sharp 17% drop in July—a steep and impulsive move downward that set the stage for the months that followed.

Since then, Microsoft has risen again, but the upward movement has been slow and marked by overlapping wave structures. This kind of corrective movement often lacks the strong momentum needed for a sustained recovery. On the chart, this movement is labeled as “corrective” with a red arrow, contrasting sharply with the decisive drop in July.

Key Levels and Support Zone

Looking at the chart, a red shaded horizontal zone emerges as a critical level. This area has acted as both resistance and support throughout the year. Over the last few days, Microsoft has moved above this zone, which could now serve as a potential support area.

Adding further significance, there’s a green box on the chart highlighting a confluence of support levels. This zone combines the red shaded horizontal area with two rising trend lines, strengthening its role as a key support region.

If Microsoft’s price dips into this green box and holds, it could bounce back upward. However, if the support zone fails, the price could drop significantly, potentially revisiting August’s low and confirming further downward movement.

This green support zone is crucial to watch in the coming days as Microsoft continues to consolidate. For now, price action remains within a decisive range that investors should monitor closely.

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