MSFT: Risk of a buyer trap near the upper boundary of the rangeThe beginning of a new year is a good time to look at the annual and monthly timeframes.
Hello traders and investors!
Annual chart
On the annual timeframe, the buyer initiative remains intact. The range of the annual initiative is as follows:
lower boundary — 213.43,
upper boundary — 555.45,
50% of the initiative — 384.44.
A key level to highlight is 349.67 — the upper boundary of the previous buyer initiative on the annual chart. This level has already been retested, and the current active level is 344.79. This area represents an important structural support zone in the event of a deeper correction.
It is also important to note that, on last year’s candle, the minimum price range where at least 50% of the volume was traded is located in the upper part of the candle. In fact, this entire area is above the previous annual high, which indicates sustained buyer interest at higher prices.
Monthly chart
On the monthly timeframe, the market remains in a sideways range that was formed back in 2024. In March–April 2025, there was a manipulation of the lower boundary of this range — a false breakout on increased volume followed by a return of price back into the range.
As a result, a buyer zone was formed with an upper boundary at 402.15. The manipulated level 385.58 also stands out, as it nearly совпides with 50% of the annual trading range (384.44). This confluence strengthens the importance of the area and makes it attractive for searching for long-term buying opportunities.
The buyer managed to push the price above the upper boundary of the range (468.35), but failed to develop the initiative further. The structure formed above this level (468.35) strongly resembles a manipulation (false breakout). Despite the previously noted sustained buyer interest at higher prices, in the current context this move may turn into a trap for late buyers.
Above the upper boundary of the range, all candles with increased volume are seller candles, indicating seller pressure and a lack of further result from the buyer side.
If the price returns back into the range, the first resistance will be 450.12 (50% of the range). If this level fails to hold the price, the probability increases for gap closures below, with a move into the 402.15–385.58 area, where it makes sense to closely monitor patterns for long-term buying, provided there is confirmation from volume and initiative structure.
On the daily timeframe , the market is in a sideways range.
The price has broken out of this range to the downside, and if the seller now initiates a trend by forming another initiative, this could indicate a decline in price toward 450 and then further down to 402.
Profitable trades!
This analysis is based on the Initiative Analysis (IA) method.
