An overview of stock market charts since the beginning of the month reveals that while the Nasdaq 100 index (US Tech 100 mini on FXOpen) is in positive territory, Microsoft (MSFT) shares have underperformed significantly. The opening price on 1st October was $427.47, but by yesterday's close, it had fallen over 3%.

One of the key drivers behind this bearish sentiment is analysis from Oppenheimer, suggesting that Microsoft's financial performance may be negatively impacted by losses related to OpenAI. Additionally, Oppenheimer downgraded Microsoft's stock rating, a concerning sign ahead of the upcoming third-quarter earnings season.

Technical analysis of Microsoft's (MSFT) stock chart shows that the price is hovering around a critical support zone, which is formed by:

→ the lower boundary of an upward channel that has been in place since early 2024 (marked in blue);
→ the psychological level of $400 per share.

What could happen next?

Bullish outlook: Microsoft's (MSFT) share price may reverse upwards from this support zone. Yesterday’s bullish candle indicates a potential increase in demand.

Bearish outlook: The median line of the blue channel has acted as resistance (shown by the arrow). It’s possible that the next level where bears could confirm control is the former support at $425.

Which scenario plays out largely depends on Microsoft's upcoming earnings report, scheduled for 22nd October.

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