Microsoft Corporation (MSFT) is an information technology conglomerate that provides various popular software products, operating systems, gaming hardware, personal computers, cloud computing solutions, and many more essential productivity technology tools. MSFT is listed on Nasdaq and is a component of DJI, Nasdaq 100, and S&P 500 under Information Tech.

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MSFT price was bullish and hitting an all-time high at $340 on 22 November 2021. According to the Wyckoff trading method, this actually became the buying climax (BC). The price reacted by retracing to around $314 and was unable to even test near $340. This then set the stage for a big Wykcoff sign of weakness down move since January 2022. The increase in volume suggests the presence of abundant supply and a sign of the Wyckoff distribution phase.

The localized spike of volume on 24 February with the big spread bar signals some reprieve from the downward pressure. A new trading range was formed between $270 and $302. The price tried to rally and broke above the range to reach $314 on 29 March. The price consolidated for five days before breaking back into range, suggesting a Wyckoff upthrust after distribution (UTAD). Furthermore, the low volume suggests a lack of demand, and the price retraced to $270. The inability to rally up in early May resembles Wyckoff's last point of supply (LPSY), which subsequently led to another sign of weakness with increased supply.

A low of around $249 on 12 May temporarily formed the Wyckoff selling climax (SC). The new trading range is between $250 and $270. There was a strong sign of strength rally to $290 but again, the inability to follow through marked the 15 Aug bar a UTAD. What followed was a slow drift to break the previous low.

The 13 October low was around $219 and rallied to $250 on 25 October. However, the price gapped down with a spike in volume due to earnings results the next day. This is another sign of bearishness due to the inability to rally up.       

Bias

Bearish. There were several Wyckoff signs of weakness and inability to rally up since December 2021, both suggesting distribution. Near term, the price is likely to retest the $219. If the price is unable to stay above that, it will likely break down to $200. Otherwise, the price may range between $219 and $250 for some time. Recent volatility in the market makes it hard to pick the winning stocks. It is essential to adopt the right techniques using the Wyckoff method to get an edge in the stock market.

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