Reversal Is Building, Buy the Pullback or the $490 Breakout?Microsoft CorporationBATS:MSFTnellikuukeriMicrosoft has bounced strongly from today's $477 low and is now testing the $489–490 resistance area. Unlike some of the other AI names currently being sold aggressively, MSFT's 30-minute momentum is actually showing real bullish confirmation: RSI has recovered to around 66 +DI is around 32, well above -DI around 11 ADX has climbed above 30, showing the new move has real trend strength MACD has crossed positive and continues expanding Price has reclaimed most of the short-term moving-average cluster around $482–485 So my current bias is bullish, but I would not chase directly into $490 resistance. Why I like Microsoft fundamentally Microsoft's latest quarter was very strong. Revenue reached $90B, +18% YoY, Microsoft Cloud revenue grew 27%, and Azure grew 43%. Commercial remaining performance obligations also climbed to $678B, showing substantial contracted future demand. The AI spending debate is still the main risk. Microsoft continues to invest enormous amounts into data centers and AI infrastructure, but strong Azure growth has recently made investors more comfortable that the spending is producing real demand and revenue. Microsoft is also reportedly preparing its next-generation Maia 300 AI chip for September as it continues building more of its own AI infrastructure. 🐂 Setup 1 — Buy the Pullback / Better R My preferred entry would be a controlled pullback into the area MSFT just reclaimed. Buy zone: $482–485 I want to see buyers defend that zone rather than price simply falling straight through it. Stop: $476.50 Target 1: $495 Target 2: $500 Target 3: $510–515 Why this setup? The $482–485 area contains several short-term moving averages and was an important resistance zone during today's recovery. If former resistance turns into support, that gives me a much better risk/reward entry than chasing near $490. 🐂 Setup 2 — Buy the Breakout / Confirmation If MSFT never gives us the pullback, I would wait for buyers to prove they can clear current resistance. The important trigger is: $489.50–490 I want a convincing 30-minute close above this area, preferably with expanding volume. Entry: $490–492 after confirmation Stop: $483–484 Target 1: $500 Target 2: $510 Target 3: $520 The $500 area is important because MSFT was rejected there during the previous rally. A clean break through $500 would make the larger continuation setup considerably more interesting. 🐻 What would invalidate the bullish thesis? The level I don't want to see lost is today's $477 low. If MSFT breaks $477 and then fails to reclaim it, I would stop looking for longs. That could open a deeper move toward: $470–472 and potentially: $460–465 I would only consider the short side after a confirmed breakdown below $477. Right now, the technical momentum favors buyers. Upcoming risk NVIDIA reports earnings on August 26. Microsoft is not as directly tied to NVIDIA's earnings as a semiconductor company like AVGO, but NVIDIA's outlook on AI infrastructure demand could still move the entire AI/mega-cap complex. So I would respect that catalyst if this trade is still open next week. My plan Bias: BULLISH Preferred entry: Wait for a pullback into $482–485 and buy the bullish rejection. Confirmation entry: Buy a clean breakout above $489.50–490. Targets: $495 → $500 → $510–515 Bullish thesis invalid below: $477 I like the recovery, but I don't like chasing resistance. Either give me a better price around $482–485, or prove the breakout above $490. Not financial advice. Just my technical and fundamental trade plan.