After a corrective decline from Microsoft’s All-Time High at $467.70, we’ve been tracking a potential complex structure unfolding — and the recent price behavior fits right into a well-formed W–X–Y–X–Z pattern.
In this latest move, we may be witnessing the final stages of the second X-wave (X2) — a sharp and extended rally that reached $462.52, pushing marginally above the first X-wave at $456.16.
Now before that raises eyebrows — yes, X2 is allowed to extend above X1. In a complex correction, X-waves are connectors, not trends. They can retrace deeply or even overshoot previous pivot highs — especially in the form of an expanded zigzag or running correction. It’s rare, but perfectly legal in Elliott’s chaotic universe.
But this leads to a question:
If the move from $344.79 is truly impulsive, then we’re potentially mid-way through a new bullish leg — with wave 3 ending at $462.78, and a mild wave 4 correction into the $437–$421 zone (0.236–0.382 retracement) expected before another pop higher. This view only holds as long as price remains below the ATH at $467.70 — our immediate invalidation level.
However, momentum indicators raise suspicions:
This sets the stage for an alternate, and perhaps more compelling, scenario:
If this is the case, then what comes next is Wave Z — the final leg down to complete the entire corrective structure.
And here’s the Elliott rulebook:
This zone becomes the primary downside watch area, should price reject from this level and fail to break above $467.70.
Summary:
We’re at a critical junction.
The rally from $344.79 could either be:
Both scenarios require careful tracking of structure, MACD, RSI, and price action near the retracement zone and the ATH invalidation level.
In this latest move, we may be witnessing the final stages of the second X-wave (X2) — a sharp and extended rally that reached $462.52, pushing marginally above the first X-wave at $456.16.
Now before that raises eyebrows — yes, X2 is allowed to extend above X1. In a complex correction, X-waves are connectors, not trends. They can retrace deeply or even overshoot previous pivot highs — especially in the form of an expanded zigzag or running correction. It’s rare, but perfectly legal in Elliott’s chaotic universe.
But this leads to a question:
Is this rally impulsive… or is it bait?
If the move from $344.79 is truly impulsive, then we’re potentially mid-way through a new bullish leg — with wave 3 ending at $462.78, and a mild wave 4 correction into the $437–$421 zone (0.236–0.382 retracement) expected before another pop higher. This view only holds as long as price remains below the ATH at $467.70 — our immediate invalidation level.
However, momentum indicators raise suspicions:
- RSI is showing a clear bearish divergence — price made a new high, but RSI didn’t confirm it.
- MACD has started rolling over, with a fading histogram — signaling potential exhaustion in this move.
This sets the stage for an alternate, and perhaps more compelling, scenario:
The rally from $344.79 to $462.78 is not a new trend — it’s the X2 wave in a still-unfinished W–X–Y–X–Z combo correction.
If this is the case, then what comes next is Wave Z — the final leg down to complete the entire corrective structure.
And here’s the Elliott rulebook:
- Wave Z must be a 3-wave structure (likely a zigzag)
- It often mirrors the size of Wave Y or contracts modestly
- Projection for Z from the X2 top targets the $393–$351 zone, which represents a 0.618–1.0 retracement of the Wave Y decline
This zone becomes the primary downside watch area, should price reject from this level and fail to break above $467.70.
Summary:
We’re at a critical junction.
The rally from $344.79 could either be:
- An impulsive move needing a wave 4 pullback
- Or a complex X2 wave — ready to hand over the baton to Wave Z
Both scenarios require careful tracking of structure, MACD, RSI, and price action near the retracement zone and the ATH invalidation level.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.