Microsoft Corporation‘s (NASDAQ:MSFT) shares have lost 20% of their value since June 1, but they are approaching a possible support level. This is why the Redmond, Washington-based company is our Stock Of The Day.
In the stock market, certain price levels have more importance than others. As you can see on the chart below, the $357 level is important for Microsoft. Over the past three years, there has been both resistance and support.
Support Can Stay Intact Due To Regretful Microsoft Sellers
Traders and investors who sold around $357 in July 2023 were glad they did when the price dropped afterward. But when the resistance broke in November 2023, many of these formerly happy traders and investors came to regret their decision to sell.
A number of them decided that, if possible, they would buy back their shares at the same price at which they were sold. When Microsoft dropped back to this price in December 2023, they placed buy orders.
These orders created support at the level.
When the shares rallied, a number of people who had sold at that level regretted it. Some vowed to buy their shares back if they could eventually do so at their selling price.
When the shares fell back to around $357 in April 2025, these remorseful sellers placed buy orders. These orders formed support.
A similar dynamic occurred in March. When Microsoft dropped back to this level, it found support again. People who sold in April 2025 placed buy orders, and these orders once again formed support at that level.
The stock is now getting close to $357. There is a good chance they find support.
Successful traders understand that some price levels are more important than others. If they can identify these levels, they will generate profits.
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