Watch These Microsoft Price Levels as Stock Closes Above $500 for First Time

Microsoft (MSFT) shares hit another record high on Wednesday as the tech giant’s market capitalization moves closer to $4 trillion. 

The company’s market cap trails only that of Nvidia (NVDA), which briefly surpassed the $4 trillion level early in Wednesday’s trading session, becoming the first company to ever achieve the milestone.

Microsoft shares rose more than 1% to around $503 on Wednesday, putting the company’s market value at $3.74 trillion. The stock has risen 46% from its early-April low and is nearly 20% higher year-to-date as of Wednesday’s close

investment bank Oppenheimer believes the tech titan has room for further upside, placing a $600 price target on Microsoft stock, in part, due to the company’s AI revenue growth prospects. Meanwhile, Wedbush analyst Dan Ives told clients in a note Wednesday that he anticipates Microsoft to reach the $4 trillion mark this summer.

Below, we take a closer look at Microsoft’s weekly chart and use technical analysis to identify price levels that investors will likely be watching.

Uptrend Continues

After bottoming near the 200-week moving average in early April, Microsoft shares have remained in a strong uptrend, gaining in 12 of the past 14 weeks.

While the relative strength index confirms bullish price momentum, it has recently crossed into overbought territory, an area on the indicator that has previously coincided with consolidation phases in the stock.

It’s worth noting that the volume has trended downward during the stock’s move higher in recent months, indicating that some larger institutional investors may be waiting for the tech giant’s next earnings report before deploying more capital.

Let’s turn to Microsoft’s chart to forecast where the shares may be headed next and also locate several crucial support levels worth monitoring during potential pullbacks in the stock.

Bullish Price Target to Watch

Investors can use bars pattern analysis to forecast how Microsoft’s current move higher may play out. When applying the technique, we take the trend higher from March to July 2023 and reposition it from the stock’s strong close above the 50-week MA in April. This analysis projects a potential bullish target of around $565, currently about 12% above Wednesday’s closing price. The prior trend analyzed took place over 18 trading weeks, indicating the current move higher could last until early September if price action rhymes.

We selected this earlier trend as it followed a strong close above the 50-week MA and closely tracks how the current move higher is playing out after a similar close above the indicator.

Support Levels Worth Monitoring

The first lower level to watch sits around $468, an area that will likely gain significant attention near last July’s prominent swing high. Investors could seek buying opportunities here if Microsoft bulls can successfully defend this crucial chart location.

Finally, a deeper retracement could see the shares revisit lower support at the $425 level. This area finds a confluence of support from the rising 50-week MA and a trendline that links an array of trading activity on the chart extending back to March last year.

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As of the date this article was written, the author does not own any of the above securities.