AI Leaders Outlook part 2: Technical Analysis of Google and Microsoft Stocks

Welcome to the follow-up piece to our individual Stock Market leaders analysis.

Yesterday's analysis took a close look at two names that have had a pretty volatile performance in the past week: Nvidia and Meta.

Get access to the analysis right here:

Read More: AI Leaders Outlook: Technical Analysis of Meta and Nvidia Stocks

Today's Index action was more volatile than yesterday, with bulls pushing to an early morning surge before mean reversion flows stepped in, leading to a sharp slowdown in momentum.

The current lack of conviction may be partially due to traders being preoccupied with the World Cup Qualifier event, which is pulling volatility out of the market.

In any case, there will be only two and a half trading sessions before the December 9th-10th FOMC rate decision, and after such volatile runs, expect things to settle down as institutions prepare for the week ahead.

Let's dive right into Weekly and intraday charts analyses for the two remaining tech giants: Microsoft (MSFT) and Alphabet, more widely known as Google (GOOG).

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Microsoft's Forward Price/Earnings (P/E) Ratio – 32.50 ~ Highs but historic for the firm

Microsoft had been invincible since its 2023 $213.44 lows, but as momentum for AI and Tech spending slowed down, the leader turned into one of the most targeted stock for profit-taking.

Victim of some pessimistic news at the beginning of the week, the stock gapped lower before coming back timidly.

This is creating a balanced picture throughout which can lead to some surprising breakouts (either to the upside or the downside).

The Weekly RSI is tilting more bearish however, so the higher timeframe isn't looking so great.

Let's see what the intraday timeframe has for us.

Looking closer, the stock is evolving in a downward channel.

Still, the action is seeing a counter-trend bullish move which will have to push further to close the week above.

Momentum is hesitant to say the least; most recent candles have been dojis so MSFT traders might just be awaiting a catalyst to move forward, maybe the FOMC or some better news.

In the bigger picture, two key levels will be coming into play for Microsoft trading:

• For bulls, they will be looking to push for a daily close above the $494 Weekly highs, which infers a breakout of the downward channel.
• A close below $475 implies a break of the counter-up trend which would continue the downward momentum.
• The next support will be found between $455 to $465 – Close to the November lows

Microsoft Technical levels of Interest:

Resistance Levels

• $540 to $555 All-time Highs Resistance
• Mid-Year range resistance $510 to $520
• Weekly Highs for Bulls to breach $493.44
• Current All-time Highs $795.71

Support Levels

• Recent Support $580 to $600 – Watch reactions if it breaks
• $581.25 November lows
• 2024 & Liberation Day Major Support $450 to $490
• 2021 Highs $382.00
• August 2023 Key Rebound Zone $272.70

Google's Forward Price/Earnings (P/E) Ratio – 28.70 ~ Far from extreme

Google is the stock of this late AI-rally, going exponential since crossing back above its early 2025 record in September.

Not seeing any considerable retracement since, the progress higher has been flawless.

If you think about it, Alphabet is positioned to capture benefits from AI:

Gemini 3 was a revolutionary update, they already have their in-house AI chips production in place, and are already making benefits compared to most of its competitors in these fields.

Momentum is going a bit ballistic however, which tends to be a great thing for stocks but can also be met with sharp corrections during any selloff.

Remember that overbought, doesn't always rhyme with imminent tops – A costly lesson during equity bull-markets.

Short-timeframe momentum seems to be slowing down after a long while and thorough breakouts for the firm.

A failed breakout above its upward channel may point to a retest of lower levels. With its momentum still flawless for now, the retracement should not be too consequent.

Expect some small-dip buying at $300 at a retest of the Gap, and in the situation of a bigger retracement, $280 to $290 looks like an ideal entry point for the Market leader.

If we do get there, keep an eye on what flows and news lead the selloff. A healthy retracement wouldn't hurt the stock but at the same time, traders will be cautious of any correction these days.

Google Technical levels of Interest:

Resistance Levels

• $320 to $330 All-time Resistance (currently testing)
• $328.67 Current ATH
• Fib-Induced Potential resistance and Psychological Level $350

Support Levels

• $300 psychological level and gap-up mini support
• High-timeframe pivot $270 to $290 acting as support
• $250 Support
• $200 to $210 Early 2025 peak
• Liberation Day Support $140 to $150
• 2022 and 2023 lows between $80 to $100

Safe Trades!

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