MSFT technicals are bullish following breakout above 515-520 resistance; overbought RSI indicates risk of short-term pullback.

One of two "Big Seven" names breaking through major resistance, Microsoft is the second. I think the key point in Microsoft's drawing is similar to what we saw with CrowdStrike, isn't it?

A large move, in this case from the June low, then a true sideways move. If you look, Microsoft is stuck in a range between 480, 490, and approximately 510, 520. It trades within this range, but in the last week it has started to surge upwards.

Sideways charts like these remind us of Jesse Livermore's famous saying: "There's a time to buy, a time to sell, and a time to go hunting." When the graph is sideways, for me, that's time to go fishing.

This is a waiting period to see what will happen, waiting for a catalyst to push the stock out of that frame, either above resistance or below support. In this case, we have strongly surpassed the 515 and 520 levels.

This removes the previous resistance range. I would say that this completes the process of moving out of that cohesion phase. I consider a graph like this to be positive until further notice.

Keep an eye on the Relative Strength Index (RSI), it is very similar to CrowdStrike. Many of these leading technical names are on upward trajectories reaching the "overbought" zone.

Again, in the long run this is usually a good sign, but it could mean a tactical retreat which is something to watch.