MSFT – Is This Just a Correction? Rising Diagonal May Collapse Toward $396
📉 Asset:
Microsoft Corp. (MSFT)
🎯 Direction:
Bearish-biased under volume uncertainty
✅ Target Zones:
First support: $430
Pullback zone: $396
📍 Current Status:
Rising ending diagonal may be complete; vulnerability increasing
🔎 Replay and Chart:
🧠 Quick Analysis Summary:
Microsoft’s price action since April 7 has formed what appears to be a classic rising ending diagonal, typically seen at the end of corrective structures. Despite the strength of the move, this formation tends to signal exhaustion rather than continuation.
Corrective waves are notoriously uncertain — they often appear impulsive and clean, but resolve into reversals. In this case, MSFT may be completing a complex correction rather than starting a new bullish leg.
⚠️ Monday’s Opening: The Decider
As with many gap-driven moves, the opening volume on Monday is critical. A strong bullish gap could push MSFT above the upper channel toward $460, but such a move would still remain vulnerable if not backed by consistent volume.
However, if the open is weak or volume is lacking, MSFT may quickly retest the rising diagonal support. A confirmed break of this structure opens the door to $430 — and if that fails, the price could decline further to test the $396 zone, a previous demand area and structural pivot.
📉 Primary Scenario – Bearish Breakdown Expected:
- Ending diagonal appears complete
- Weak open favors breakdown
- $430 = immediate support
- $396 = deeper pullback zone if breakdown gains momentum
📈 Alternate Scenario – Conditional Breakout:
- Gap-up open + strong volume = breakout above $460
- Could test short-term highs
- Still within corrective context
- Traders should treat upside with caution unless breakout holds
🔍 Key Technical Focus:
- Elliott Wave: Corrective ending diagonal
- Volume is critical for confirmation
- Structure suggests market exhaustion
- $396 = major support to watch
- Trendline break = confirmation
📌 Conclusion:
MSFT’s rally may be nothing more than a corrective phase masquerading as strength. While temporary breakout attempts above $460 are possible, the real risk lies below.
A weak open and diagonal trend break could trigger a deeper move toward $396. This setup presents high R/R short opportunities if volume fails to support price. Upside is unlikely to sustain without confirmation.
