Microsoft – Monthly Analysis
Microsoft has triggered one of its rarest long-term technical warnings in decades.
Several independent signals, from quarterly momentum to 4-month candles and Elliott Wave structure, are now converging toward the same uncomfortable message: this may be more than a routine correction.
In this analysis, we break down the historical statistics, examine the emerging patterns, and assess what they may signal for Microsoft’s next major move.
MACD
The signal is in. As highlighted in the previous update in March, Microsoft recorded a quarterly MACD bearish cross of unprecedented magnitude.
Only two comparable events have occurred before, in 2000 and 2008, and both were followed by substantial declines of 66% and 60%, respectively.
Applying a similar framework today implies an average drawdown of roughly 63%, with a potential support zone near the 50-quarter MA, around $200.
Candles
The April close was very serious. Bears held pressure for eight months, and, as a result, MSFT closed the 4M frame with a Tower Top and a break below the 8 EMA. There have been only two comparable technical events, in January 2000 and January 2008, and both marked the beginning of long-term bear cycles that led to losses of more than 60% from top to bottom.
The 2M frame printed a small green candle, which is neutral for now, but most likely represents consolidation on a bearish path. It still needs confirmation.
The monthly frame formed a bullish Inside Up. However, due to weak technical support, it should be treated as neutral until the end of May, pending confirmation.
The last two days of the week flipped the weekly frame, and the weekly close was moderately bearish.
Overall, Microsoft is likely to face moderate bearish pressure in the short and mid term next week, while the long-term bearish pressure remains unprecedented.
Elliott Wave
All Time Chart
The sharp decline in Microsoft has most likely locked in the structure of the wave developing since November 2022, and the implications are not encouraging.
The entire 3.5-year move now fits best as an Ending Diagonal. This structure aligns with either the blue count, where the diagonal is wave 5 of III, or the purple count, where it represents wave V of (I). There is also a bullish alternative, where the diagonal acts as a Leading Diagonal for a larger impulse, but this scenario currently lacks meaningful technical support.
The key takeaway is independent of the count: after diagonals, price tends to return to the level of origin. In this case, a move back toward the 2022 lows around $213, roughly a 62% decline from the ATH, would not be surprising. This aligns closely with the MACD-based projections discussed earlier in March and the recent 4-month candle signals mentioned earlier in this analysis.
One more thing to keep in mind: when these structures unwind, they tend to do so quickly.
These are the perspective bearish paths.
Last Wave
Microsoft bounced meaningfully off the March bottom. However, the wave structure does not provide clean support for an impulsive interpretation. The very first wave off the low appears to be a three-wave structure, which makes it corrective and therefore weakens, or potentially invalidates, the impulsive interpretation under the red count.
That said, there was a gap within that structure, leaving a small possibility that the first wave could still be interpreted as a five-wave move under the blue count. In that case, the key level is now $385.00. If MSFT holds above it, the impulse scenario off the March bottom remains possible. If MSFT breaks below $385.00, it would confirm the corrective character of the recent rally. In that case, the focus would shift to either the red path, which implies a more moderate continuation lower, or the sharper purple path.
SUMMARY
Microsoft is sending a rare and highly concerning long-term technical message, with several independent signals now converging toward a similar outcome. The quarterly MACD bearish cross, the April 4M Tower Top with a break below the 8 EMA, and the Elliott Wave structure all point to elevated risk of a major corrective phase rather than a routine pullback.
The key point is the convergence of estimates. The historical MACD analogs from 2000 and 2008 were followed by declines of 66% and 60%, implying an average drawdown near 63%. The 4M Tower Top analogs from January 2000 and January 2008 also marked the beginning of long-term bear cycles that erased more than 60% of MSFT’s value. The Elliott Wave structure now fits best as an Ending Diagonal from the November 2022 low, and the classical expectation after diagonals is a return toward the origin, near the 2022 lows around $213. That would represent roughly a 62% decline from the ATH.
This alignment is difficult to ignore. Different methods, quarterly MACD history, 4M candle analogs, and Elliott Wave structure, all point toward the same general area and magnitude: a potential decline of roughly 60%+ from the ATH, with the $200–$213 zone acting as the most important long-term support target.
Shorter-term frames are less decisive but still fragile. The 2M and monthly signals are not outright bearish yet, but they look more like consolidation within a bearish path than a confirmed reversal. The weekly has already flipped moderately bearish, and $385 remains the key near-term level. If MSFT breaks below it, the recent March bounce would likely be confirmed as corrective, opening the door to the red or sharper purple path lower.
Overall, Microsoft remains under unprecedented long-term bearish pressure. The exact path may vary, but the message across multiple tools is remarkably consistent: unless MSFT quickly negates these signals, the stock may be entering a major corrective phase, and if the diagonal structure continues to unwind, the move could develop much faster than many expect.
