MSFT: Double-Top, or Bull Flag Breakout?

Oct 31, 2023

MSFT is showing a mixture of bullish and bearish signals; however, the most concerning of which is an active rug pull event which kicked off on March 16, 2023 at $265.20 via the 2D timeframe:



This coincides with a large RSI divergence event occurring on the larger timeframes; highlighting the potential for a double-top:



That being said, there appears to also be a major bull flag forming on the larger timeframes:



If we dive a bit deeper into the smaller timeframes and analyze the bull flag, we see another active rug pull at $345. This signals a high likelihood MSFT will hit $345 in the near future:



With a high degree of both bullish and bearish signals, it can be hard to discern where MSFT might be headed next.

We are keeping a very close eye on the AVWAP derived from the March 16 event as a guiding factor. Should the price significantly break below this level, we expect further drawdown to $265 will occur.

Nov 2, 2023

Note

First target at $345 has been reached. AVWAP very much in-tact. Awaiting signs of a reversal to begin targeting $265 range

Nov 7, 2023

Note

MSFT along with the broader markets saw an incredible boost in price during this past week. The RSI appears to be extended far above its moving average, signaling a likelihood that price action will consolidate from these levels or retest important support



We see a multi-year bearish divergence trendline in the RSI. As of today, MSFT has not yet broken this resistance. We feel this is the primary factor in determining whether the double-top (bearish) or bull-flag (bullish) outcome will ultimately occur. See below:

Dec 14, 2023

Note

Despite the bull-flag breakout, it appears the 4-year bearish divergence on the RSI was rejected at resistance. Until MSFT breaks this resistance, it is unlikely to make any meaningful momentum upwards.

Could this be a warning signal for the broader market as a whole as it nears ATHs?