Microsoft slips to $433 as overbought RSI and weak volume signal cooling rally

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Sholanke Dele

06.05.2025

Microsoft slips to $433 as overbought RSI and weak volume signal cooling rally — Microsoft stock had slipped further to $433, pointing to an ongoing retracement

Microsoft’s stock post-earnings rally is starting to show signs of exhaustion, as the stock struggles to push past a key technical barrier.

After a 1.7% gain on Monday that lifted the stock from an intraday low of $432.10 to challenge resistance at $439.50, price momentum faded and Microsoft closed the day lower at $436.20. The failed attempt to break through this resistance zone is now acting as a turning point in the short-term trend.

By Tuesday’s premarket session, Microsoft stock had slipped further to $433, pointing to an ongoing retracement. This pullback is unfolding against the backdrop of an overextended rally. Technical indicators support the current cooldown — both the 4-hour and daily RSI are deep in overbought territory. Such readings often precede a short-term reversal, especially when paired with weakening follow-through.

Microsoft price dynamics (July 2024 - May 2025). Source: TradingView

Volume patterns over recent sessions further validate the slowdown. Despite the earnings boost, buying volume has been declining, an early indication that enthusiasm for adding new long positions is waning. This suggests that investors who capitalized on the earnings-induced upside are now booking profits, leaving fewer buyers to sustain the rally.

Microsoft faces resistance at $439.50 while institutional buyers await lower re-entry

In terms of key technical levels, support at $418.24 stands out. This zone could act as the first line of defense for bulls during the ongoing retracement. A breakdown below that level would likely erase the bulk of Microsoft’s earnings-related gains, exposing the stock to deeper short-term correction.

That said, the broader outlook for Microsoft is still strong. Institutional investors may be closely watching this retracement, not as a threat, but as an opportunity to re-enter at more favorable levels. If price stabilizes above $418.24, the next move could be a more sustained push toward retesting the $439.50 resistance.

Until then, the current phase reflects a healthy technical pullback, a common occurrence after steep earnings-fuelled rallies shaped by profit-taking, weakening volume, and overstretched RSI conditions. Traders now look to the $418.24–$439.50 range as the key zone for short-term direction clues.

Microsoft surged to a $3.24 trillion valuation after a strong Q3 earnings report highlighted robust Azure growth. The stock posted an 11% weekly gain and approached its all-time high.

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