Watch These Microsoft Price Levels as Stock Continues Hitting All-Time Highs

Microsoft shares (MSFT) hit another all-time high on Thursday, boosted by investor enthusiasm about the company’s position in the AI race.

On Tuesday, Wells Fargo lifted its price target on the stock, citing the company’s early AI lead and strong incumbent position in a tight market. Analysts at Wedbush on Wednesday also raised their price target, noting that the tech giant stands to benefit from a massive adoption wave of Copilot and Azure monetization as enterprise clients deploy AI tools,

The bullish commentary comes after a report surfaced last week that the Windows maker is planning to cut thousands of jobs as it looks to reduce labor costs while increasing its AI spending.

Microsoft shares have gained 18% since the start of the year, making the stock the second-best performer in the Magnificent 7, behind only Facebook and Instagram parent Meta Platforms (META). Microsoft gained 1.1% on Thursday to close at $497.45.

Below, we break down the technicals on Microsoft’s chart and point out key levels worth watching out for.

Narrow Ascending Channel Remains Intact

After closing above the 50- and 200-day moving averages last month, Microsoft shares have traded higher within a narrow ascending channel on low volatility.

The move has coincided with the relative strength index remaining mostly above the indicator’s 70 threshold, signaling strong momentum. In another sign that the bulls remain in control of the price action, the 50-day MA crossed above the 200-day MA earlier this month to generate a golden cross pattern.

However, more recently, the stock formed a doji in Wednesday’s trading session, a candlestick pattern that indicates indecision among buyers and sellers.

Let’s apply technical analysis to project a potential upside target if Microsoft shares continue their trend higher and also identify support levels worth eyeing during pullbacks.

Measured Move Upside Target

Investors can use the measured move technique, also known by chart watchers as the measuring principle, to project a potential upside target in the stock.

When applying the analysis to Microsoft’s chart, we calculate the distance of the ascending channel from its low to high and add that amount to the pattern’s top trendline. This projects a target of $565 ($70 + $495).

Key Support Levels Worth Eyeing

The first level to watch sits around $468. Pullbacks to this area on the chart could attract buying interest near last year’s prominent July swing high.

Finally, a more significant drop in Microsoft shares could see a retracement to the $425 level. Investors may place buy limit orders in this location near the rising 200-day MA, the low of the ascending channel, and a trendline that connects a series of trading activity on the chart stretching back to last May.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.