A fundamental analyst at a sell-side firm lowered their rating on the tech giant Microsoft (MSFT) to "neutral" from "buy" Wednesday. And their price target was dropped to $250 from $300.
Let's check out the charts and indicators to see if this was "the last shoe dropping" or if there is more weakness to come.
In the daily bar chart of MSFT, below, I see that the shares failed at the underside of the declining 200-day moving average line in December. Prices gapped lower Wednesday and gapped below the 50-day moving average line.
The On-Balance-Volume (OBV) line has been weak since mid-August and tells me that traders remain more aggressive sellers than buyers. The Moving Average Convergence Divergence (MACD) oscillator has crossed below the zero line for an outright sell signal.
The lows of October and November could generate some support and the current decline may halt but weakness below $225 may precipitate further declines and new 52-week lows in the weeks ahead.