Microsoft’s Higher Trough Hints at a Bullish Leg

We believe Microsoft (MSFT) has formed a higher trough - a bullish sign. Its EMAs have crossed positively, and the RSI has moved above 50, signalling improving momentum. If the RSI holds above that level, it will confirm a strengthening trend that could see MSFT challenge resistance near $530.

The company reports next Wednesday after the close, with investor attention centred on Azure and Copilot - the pillars of its AI strategy. Copilot, now embedded across Microsoft 365, Teams, and Outlook, is gaining strong enterprise adoption; for instance, Barclays recently expanded its licences from 15,000 to 100,000. The AI assistant could generate billions in recurring revenue, while Azure - which grew 39% year-on-year last quarter, its fastest pace in three years - remains the primary growth driver. Sustained progress in both areas will be crucial for maintaining investor confidence.

Although momentum has yet to reach full strength for a decisive breakout, it is clearly building. Next week’s earnings could provide the catalyst needed to push it over that threshold.