$MSFT – Monthly Analysis
Microsoft has frustrated investors lately, so let’s tackle the key questions: has it bottomed—and if not, how much downside remains? In this update, we audit the tape across frames—candles, momentum, and Elliott Wave structure—to map the highest-probability paths. If there’s light at the end of the tunnel, we’ll spot it before the crowd.
CANDLES
On the monthly frame, Microsoft is still projecting confidence: two failures to confirm a bearish Dark Cloud Cover, price holding above major supports, and this summer’s Three White Soldiers keep the long-term outlook in bulls’ hands. The short/mid-term picture is at risk. The weekly closed with a confirmed top, albeit on weak technicals. The daily is falling, though Friday’s candle could be a reversal—technicals suggest as much.
The next key test is Tuesday, November 11. If Microsoft closes with the current configuration, it will likely form a Falling Three Methods. A 3.5%+ lift across Monday–Tuesday would prevent that combo. Let’s see whether the long-term bullish odds step in and spare the stock a larger decline.
Elliott Wave
At this point, I continue to view the green count as primary, with the large flat (possibly a flag) serving as wave 4. The retrace is a bit shallow for a typical Fibonacci wave (2), and the technicals favor the blue count over the red. If MSFT prints a strong bullish candle—an Engulfing or Piercing Line—in the next 1–2 days, I’d prepare for a 12–15% (or larger) wave-5 rally over the next 2–3 months.
The long-term chart is essentially unchanged. The recent rally was rejected cleanly at the channel’s upper boundary. The current leg is either wave 4 of (1) (green) or wave 2 (red).
SUMMARY
MSFT is showing early signs of a bottom after a sizable consolidation that began in July. If a bottom doesn’t form in the next 1–2 days, the stock could slip lower and the red count would become primary. If the bottom holds, MSFT could begin a significant 12–15% rally over the next few months. A strong bullish daily candle on Monday/Tuesday would likely resume the rally that began in April and prevent bearish pressure from spreading beyond the weekly frame.
MSFT’s recent weakness has weighed on the Nasdaq and, to a lesser extent, the S&P 500. Once the giant turns higher, both indices should see a healthy boost.
Happy Trading!
