Is The Microsoft Party Over For Now?

Shares of Microsoft Corporation MSFT have broken their recent uptrend. They have also crashed into a wall of resistance at the $290 level. This may mean the recent rally is over, at least for the time being. It could even mean a new downtrend is about to form.

When markets are rallying, the forces of demand (buyers) overpower the forces of supply (sellers). The breaking of an uptrend line is an illustration that the forces have become equalized. It could also be an early signal that the sellers are about to drive the price lower.

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Resistance is a large concentration of sellers gathered at the same price. In this case, it’s $290. For the past two weeks, these sellers have kept a top on the price.

These two dynamics, breaking the uptrend and hitting resistance could be bearish for Microsoft's stock.