Welcome to our comprehensive weekly analysis for Microsoft (NASDAQ: MSFT) covering Week 3 of January 2026. In this post, we’ll break down the latest price action, key technical levels, news catalysts, and provide actionable scenarios for traders and investors. 📊💡

Latest Price Chart & Technical Overview

See the full-width chart above for visual reference (includes volume and MACD).

• Trend: Bearish, with price below both 10-day and 20-day EMAs.

• Momentum: RSI at 33.80 (bearish, nearing oversold); MACD histogram negative.

• Pattern: Descending channel, lower highs and lower lows.

• Volume: Increasing on declines, confirming bearish momentum.

Key Support & Resistance Levels

Summary of Latest News & Catalysts (Jan 12–18, 2026)

• Tariff Shock: The US government imposed a 25% "Silicon Surcharge" on high-performance semiconductors (Jan 14), raising costs for cloud and AI infrastructure. [source]

• AI Hype Fades: Microsoft stock is down 16% from its all-time high, with analysts noting waning AI enthusiasm and a shift in investor focus. [source]

• Layoff Rumors: Reports suggest Microsoft is planning over 11,000 job cuts in January to manage rising AI costs. [source]

Technical Analysis

• Price Action: MSFT is in a clear downtrend, trading below both the 10-day and 20-day EMAs. This signals bearish momentum and a lack of immediate bullish reversal.

• MACD: The MACD histogram is negative, confirming downside momentum. No bullish crossover is visible yet.

• Volume: Volume has increased on down days, which often precedes further declines as sellers dominate.

• Pattern: The descending channel structure suggests lower highs and lower lows, with no confirmed reversal pattern.

• RSI: At 33.80, the RSI is approaching oversold territory, but not yet at an extreme. This could mean more downside before a technical bounce.

Support & Resistance Table

Fundamental & News Impact

• Earnings: Q1 2026 revenue was $77.7B (+18.43% YoY). Next earnings due Jan 28, with focus on Azure/cloud and AI.

• Macroeconomic Headwinds: Higher US Treasury yields (10-year at 4.16%) are pressuring tech valuations.

• Tariffs: The new semiconductor tariffs are expected to compress margins and raise capex for AI/cloud, impacting near-term profitability.

• Layoffs: Cost-cutting via layoffs may support margins, but signals management’s caution amid rising AI expenses.

• Analyst Sentiment: Mixed; some see MSFT as a top AI pick for 2026 ($625–$640 targets), but technicals and macro risks weigh short-term.

Possible Scenarios for the Upcoming Week

Trade Ideas & Risk Management

• Aggressive: Short at 469.00 (lower high), stop 480.00, target 450.00.

• Conservative: Wait for break below 456.00, short at 455.00, stop 465.00, target 440.00.

• Risk: Limit to 1% of capital per trade; use ATR(14-day) for stop-loss sizing.

Conclusion

Microsoft faces a challenging week as technicals remain bearish and macro headwinds persist. Watch for tariff impacts, earnings anticipation, and potential layoff news. The downtrend is likely to continue unless a significant catalyst emerges. 📉🕵️‍♂️

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please conduct your own research or consult a professional before making trading decisions.