Last updated on April 16th, 2023 at 12:36 pm
In this blog post, we will look at Microsoft stock (MSFT) on a weekly stock price chart. We will be using technical analysis to find out when it might be a good time to buy or sell the stock.
The first step in technical analysis is to identify the trend. Looking at the weekly chart of MSFT, we can see that the stock the stock seems to be on an upward trend since the beginning of 2023. The entire 2022 was downward for the stock and since Jan 2023, it seems to be making higher highs.
Support and Resistance Levels
Next, we can identify the key support and resistance levels on the weekly chart. The support level is the price level where buying pressure is expected to emerge. The resistance is the price level where selling pressure is expected to emerge.
From the weekly chart, we can see that the stock price broke above the 50 weekly moving average a couple of weeks ago. It is currently trading at the resistance level of around $290.
The 50 weekly moving average could be the first level of support if the stock starts to fall from here. The next support seems to be at a price of around $242. The strongest level of support is the 200 weekly moving average at $232 dollars.
Technical Indicators
Technical indicators can also be used to identify potential entry and exit points. In this analysis, we will be using the moving average convergence divergence (MACD), relative strength index (RSI) and stochastics.
• MACD, a reliable metric to gauge trends and stock momentum, signals a bullish trend as the violet line is above the orange line for weeks. However, with the stock trading near the resistance level, it’s not an optimal time to buy.
• RSI is another effective tool to determine if a stock is overbought or oversold. When the RSI crosses above 30, it indicates a buy signal and when it crosses below 70, a sell signal. With RSI moving up and around 63, the stock price may rise further. But, it’s wise to wait as the stock has already been trading high for a while..
• Stochastics, another technical indicator, can help investors forecast whether the stock will continue in its current direction or undergo a trend reversal. The black line intersecting with the red line at the upper end of the band indicates a trend reversal could be on the way. With its value at 97 and the stock trading upwards for a long time, a trend reversal may be imminent. Hence, this indicator does not show a buy sign.
At what price should I buy MSFT stock?
Based on the analysis of Microsoft stock’s weekly chart, it is evident that the stock has been in an overall bull trend for several weeks. However, most indicators suggest an impending trend reversal, so it’s advisable to wait for the stock to cool down before buying. Technical analysis also indicates that the price is overbought, and the stock may trend downwards or sideways in the near future. Swing traders may consider creating exit strategies at this price level.
For long-term investors seeking an optimal entry point, the current stock price is not favorable. A good entry point would be when it falls back to one of the support levels. Based on technicals, investors could start buying the stock within the $232 to $245 range.
As with all investments, it is essential to conduct your research and analysis before making any trading decisions.
