MSFT Operational landscape

MSFT Operational Landscape: A Deep Dive into Current and Future Trends

Understanding the operational landscape of MSFT is crucial for identifying behavioral patterns through confluences. The chart indicates the start of the current bullish trend around August/September 2023, highlighted by a double bottom forming at a confluence of support from the 195-minute, daily, and weekly zones (yellow horizontal arrow). It’s important to note that the stochastic moved from oversold with a False Breakout Stochastic to overbought with the same indicator. This is a clear sign of a trend switch, in confluence with the double bottom at multiple time frame support zones.

MSFT Recent Trends and Predictions

A significant impulse move higher occurred in October/November 2023, followed by a wave 2 profit-taking pullback that found nonlinear support at the 55 EMA cloud (grey EMA cloud). This triple bottom (pivots within 3% of each other) subsequently established a new linear support zone, highlighted by the red box on the 195-minute chart. This confluence of nonlinear and linear support could come into play if we experience a pullback on MSFT stock in the next six months.

In January/February 2024, we saw the largest impulse move (Elliott Wave 3), followed by a very orderly Wave 4 profit-taking pullback that met all my rules for normal behavior. During March, the stock made new highs and hit my 5th Wave Target Zone. I successfully executed a swing trade with CFDs for the 5th wave move and also added shares to my MSFT position.

Current Market Scenario MSFT

We are in interesting times now for Microsoft, having recently tested those highs of the 5th wave zone at the B pivot (small green down arrow) in mid-April, then found support around the Wave 4 support. Currently, in mid-May, we are looking to test this support again.

Here are two main scenarios I am considering for trading $MSFT:

  1. Resistance Holds: If the resistance holds with the 3rd touch around $430, forming a new resistance zone, we may look to trade the continued corrective action. This could involve employing the “shorting to feed the investment pot” strategy I discuss in my book, Confluence Not Coincidence. This is a tactic I frequently use with MSFT.
  2. Breaking Resistance: If the short-term resistance is broken, we could see a surge, followed by a retest of the wave 5 zone, which would then act as support. This would be an ideal time to accumulate more MSFT shares.

I will certainly be keeping a close eye on this stock over the summer for short-term swing opportunities with a few of my strategies.

Microsoft’s AI Investment and Tech Stock Trends

In addition to the technical analysis, it’s worth noting Microsoft’s recent announcement regarding their significant investment in AI. This move is expected to further solidify their position as a tech leader and drive innovation across various sectors. As AI continues to revolutionize industries, Microsoft’s strategic investments could lead to substantial long-term growth and stability.

The tech sector, particularly in the USA, has been experiencing a remarkable rise, with all-time highs in US indexes reflecting investor confidence. Companies like Microsoft are at the forefront of this growth, leveraging cutting-edge technology and robust business models to achieve new milestones.

Confluence Trading Strategies

For those interested in diving deeper into trading strategies, my book, Confluence Not Coincidence, provides comprehensive insights into confluence trading. The book includes detailed examples featuring MSFT, illustrating how to identify and capitalize on confluence patterns to enhance trading and investment decisions.

By understanding and applying these strategies, traders can better navigate the complexities of the market, making informed decisions that align with long-term financial goals.

Engage with Us

I encourage you to explore my book to learn more about confluence trading and investing strategies. It offers valuable knowledge and practical techniques that can help both novice and seasoned traders optimize their portfolios.

Stay tuned for more updates and insights on MSFT and other tech stocks. Follow our page for the latest market analysis and trading tips.

Check out my book, [Confluence Not Coincidence](#), to learn more about advanced trading and investing strategies and how to apply them to your investment journey.

Read a shorter version of this article is on a post on my stocktwits now here

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