Microsoft - Mid-short-term Analysis

This chart represents Microsoft in its Mid-short term Elliot wave analysis, with our primary expectations for this market.

At the beginning of 2023, Microsoft completed its corrective structure in green wave 4 and initiated a new impulsive advance in green wave 5. This larger-degree wave marks the development of yellow wave 1 within the long-term bullish cycle.

Within this advance, Microsoft formed a complete five-wave impulse in light blue, representing the internal structure of green wave 5.

• Light blue wave 1 initiated the rally.
• Light blue wave 2 followed with a corrective pullback.
• Light blue wave 3 extended impulsively to the upside.
• Light blue wave 4 unfolded as a consolidation phase.

The stock is now progressing through the final light blue wave 5, which is expected to complete both green wave 5 and the broader yellow wave 1.

Zooming into the internal structure, light blue wave (5) subdivides into a dark blue impulsive sequence. This dark blue cycle has already completed waves 1, 2, and 3, and is currently unfolding a corrective dark blue wave 4.

This wave 4 correction is targeting the Fibonacci retracement zone between 23.6% at $508.27 and 38.2% at $479.13. Microsoft has already tested this retracement area, which could serve as a potential reversal zone for the final push higher into dark blue wave 5.

Should the price confirm an upward reversal and break above the local resistance at $555.56 (highlighted in neon green), we expect dark blue wave 5 to extend toward our Fibonacci extension targets between 123.6% at $605.21and 138.2% at $635.93.

Around this target zone, we anticipate the completion of dark blue wave 5, light blue wave 5, green wave 5, and ultimately yellow wave 1 — marking the end of the long-term impulsive cycle.

Trading Plan: 

 Our retracement target zone marks a  very good buy opportunity, as it likely represents the final stage of the ongoing corrective dark blue wave 4. From this zone, we anticipate Microsoft to regain bullish momentum and begin its next impulsive advance toward the price target zone, where we plan to consider profit-taking as the broader wave structure reaches completion.

Keep in mind:

This outlook reflects our primary expectation for Microsoft`s Mid to short-term performance. Always ensure that you review our long-term projections first before moving on to our mid- and short-term Elliott Wave analyses.