$MSFT – Monthly Analysis
Microsoft has recently exhibited several developments that warrant close attention due to their potential significance and impact. In this update, we review the tape across multiple frames—candles, momentum, and Elliott Wave structure—to outline the highest-probability paths. If there is light at the end of the tunnel, this approach should allow us to identify it ahead of the broader market.
CANDLES
That was a one-time stick-save in the final days of November. Had MSFT closed below the July low, it would have constituted a very strong bearish confirmation of a monthly top. Instead, the price was pulled back above that level, and the May–June–July Three White Soldiers pattern remains fully intact.
The daily frame formed a bullish continuation after completing a bottom, and the weekly produced a bullish Harami. An important closure is approaching on Tuesday with the 10-day frame. A close above $493.25 would prevent MSFT from confirming bearishness on this frame and would add weight to the bullish case.
Overall, Microsoft remains primarily bullish across most time frames. If November’s momentum carries into next week, the stock is likely to finish December with gains.
Elliott Wave
MSFT pushed lower during the correction, and we can now treat the recent move as wave (2) in red while still keeping the possibility of a wave 4 in green.
The long-term chart is essentially unchanged.
Classical Pattern – Flag
MSFT is likely approaching the completion of another bullish flag, most clearly visible on the weekly chart. The projected targets for this formation align well with those of a much larger flag tracked on the long-term chart above. If MSFT confirms a weekly reversal, a sizeable rally—potentially on the order of 35% over the next few quarters—should be expected.
SUMMARY
MSFT bears made a significant mistake by failing to close the stock below the July low in November. As a result, the bulls now control the stage, with strong odds of resuming a long-term rally that could last for several quarters. From an Elliott Wave perspective, this may develop into a major wave (3), although the supporting technicals are still forming and will require confirmation.
MSFT is bullish in both the short and long term, while the mid-term faces several critical tests next week. If these are passed, the path toward new all-time highs—with a potential gain of 35% or more—opens up. Such a move would naturally deliver a substantial boost to all major indices in which MSFT is a key component.
Happy Trading!
