Microsoft shares rose for the the seventh consecutive session on Tuesday, with the latest gains coming after the tech giant hiked its quarterly dividend by 10% and approved a $60 billion stock buyback.
Microsoft shares extended their rally for the seventh consecutive session on Tuesday, fueled by the company’s announcement of a 10% increase in its quarterly dividend and approval of a $60 billion stock buyback program. Investor optimism may continue into Wednesday after Microsoft and BlackRock, the world’s largest asset manager, revealed plans to launch a $30 billion AI infrastructure fund late Tuesday.
The AI infrastructure fund, targeting data centers and energy projects to meet the increasing demand for AI computing power, could potentially mobilize up to $100 billion in total investment with debt financing. Abu Dhabi-based investment firm MGX is also involved, and AI leader Nvidia will contribute its expertise to the fund.
From a technical analysis perspective, Microsoft’s stock may be signaling a potential head and shoulders top, which could forecast a bullish-to-bearish trend reversal. After hitting a low just below its 200-day moving average (MA) in early August, the stock traded sideways before beginning another upward move this month. Notably, this recent advance has occurred on declining trading volume, which suggests limited participation from larger market players.
Microsoft shares closed at $435.15 on Tuesday, gaining 0.9%. Investors should monitor the following key resistance and support levels for future price movements:
Resistance Levels to Watch
If Microsoft continues to rise, it may initially face resistance around $448, where earlier buyers may look for exit points near a trendline formed by consolidations in June and July. A breakthrough of this level could see the stock retest the $468 zone, close to its all-time high set in early July. A sustained move above $468 would invalidate the potential head and shoulders pattern.
Resistance Levels to Watch
On the downside, the $410 area near the rising 200-day MA could offer support, as it has aligned with several significant trading levels since January. Should the stock face further weakness, a decline toward $385 is possible, a region where buyers may step in around the November swing high and August swing low. A break below $385 would confirm the head and shoulders formation, signaling a bearish trend reversal for Microsoft’s stock.
Investors will need to keep a close watch on these key levels as Microsoft navigates a rapidly evolving market environment, bolstered by its strategic moves in AI and ongoing efforts to enhance shareholder value.
