Here's Where Microsoft Stock Needs to Hold Support on a Pullback

-- Microsoft stock has been trading very well this year, up almost 20%. As it wavers on a pullback, here are the must-hold support levels bulls need to know. --

By Bret Kenwell, TheStreet.com

Microsoft (MSFT) has been trading great on the long side lately, as tech stocks have been trading well and as it has the AI catalyst to boot.

Earlier this year, Microsoft made a multi-billion investment in ChatGPT parent OpenAI and continues to work those technologies into its existing products and platforms.

Broadly speaking though, Microsoft, Apple (AAPL), Nvidia  (NVDA), Meta (META), Tesla (TSLA) and others have been responsible for a bulk of the market gains.

Microsoft stock is down almost 2% so far on the day. Even with the decline, shares are still up roughly 19% so far on the year.

While that lags some of the massive gains we've seen in other names - like Nvidia, Meta and Tesla - it's pretty impressive for a company this size.

When combined with Apple's 26.7% year-to-date gain and the fact that Microsoft and Apple make up about 25% of the Nasdaq 100 and more than 13% of the S&P 500, the performance of these two stocks becomes significant.

So how does the chart look?

Trading Microsoft Stock

Daily chart of Microsoft stock

Chart courtesy of TrendSpider.com

Microsoft stock continued to struggle with the $280 area in March, but burst over it on March 30 and has been able to hold it as support.

As it comes under pressure a bit on Friday, see that it continues to hold the $280 level and the 21-day moving average. If it can do so, a move back toward $290 is possible, with the April highs in play up near $292.

Ultimately, investors will be fishing for the August highs near $294 on any significant rally, then $300.

Of course, all of this is predicated on Microsoft stock holding support.

If it can't, the $275 level - which like $280, was prior resistance turned current support - will be in play, along with the rising 10-week moving average.

If the stock begins to break down below these measures, as well as the 50-day moving average, then bulls really need to wake up and reassess this stock. A break below those measures would indicate a faltering trend and at the very least, suggest caution in the short term.

From TheStreet.com