Microsoft Corp (US: MSFT) bullish rally has performed better than our expected target price based on our report on the 9^th June. The technicals that Microsoft is entering into a correction despite a rebound on 15^th June. The rebound did not sustain and failed to reach the $200.00 psychological level.

1. The rising wedge formation from 27^th May to 19^th June indicates a potential reversal of the bear due to the consolidation converging pattern, signalling a loss of momentum.
2. Microsoft rejects the 1.13% extension level on 10^th June and 19^th
3. The latest dark cloud cover formation rejecting 1.13% extension dashes the hope of a continued rally.
4. Relative Strength Index is showing a bearish divergence. Indicating a loss of momentum ahead.

*The technical call is valid for 2 weeks only.

* The trend for Microsoft is still bullish, the short call is to take advantage of the correction, hence our stop loss level and risk to reward ratio remains low.

*The support level 1 and 2 remain key support levels and prices may reverse at either levels. Should the stock exhibit signs of bullish reversal near or at the levels, the next resistance to be tested is at 127.2% of the Fibonacci extension level. 

CHART LEGENDS

Moving average

Red dotted line = 200 day period moving average

Blue dotted line = 50 day period moving average