MSFT (TECHNOLOGY/APPLICATION SOFTWARE)

Price Objectives

Extreme Upper Bound	38.07: 2001 High Retested in 2007 (Figure 1)
Upper Bound	29.35: October 23, 2009 High (Figure 2)
Current Price	28.52
Lower Bound	~ 23.84: Inflection point at the 38.2% Retracement Level (Figure 2)
Extreme Lower Bound	~ 20.5: Significant Inflection point (Figure 2)

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As Figure 1 shows, MSFT faces significant resistance at the ~30 level. Even though this level was penetrated on several occasions, its significance is proven because MSFT was unable to penetrate above it on its previous attempt on October 23, 2009 when it made a high of 29.35.
MSFT is likely to retrace a portion of its previous rally because the 61.8% confluence zone (Red circles in Figure 2) resisted MSFT from breaking out.
As I identify in Figure 3, MSFT is correcting after the occurrence of the Exhaustion Gap.

In sum, the three factors listed above- (1) resistance at ~30, (2) resistance at the 61.8% confluence zone, and (3) Exhaustion gap – give me greater confidence in forecasting a retracing MSFT in the intermediate term.

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The question then is that if MSFT follows my outlined script, then what are the lower price objectives?
~24: This level is a major inflection point because both the 38.2% confluence zones coincide almost perfectly at this level. Refer to Figure 2.
~20.5: A 61.8% confluence zone and a major support level that started in late 2000 coincide near perfectly to form a significant inflection point. Refer to Figure 1.