September 25th, 2026
Hi Traders!
Microsoft is leading price action this morning.
Overnight, the company officially rolled out the new Copilot app, bringing Home, Code, and Autopilot together in one place, with Word, Excel, and PowerPoint built directly into the experience. Home combines Chat and Cowork. Code lets non-developers build apps and automations using the same stack as GitHub Copilot. Autopilot, formerly Scout, is the always-on agent that keeps working when you step away. Nadella is framing Copilot as the OS for work. That is the product story the market has wanted to see move from seats into a broader platform.
This matters more than a single product headline because Microsoft is a Nasdaq leader. When MSFT starts working, it does not just help one stock. It helps the index. That is why the quiet stretch in this name was so important. Microsoft slept through the 2026 downtrend for quite some time, while other AI names did the heavy lifting. That changed last quarter. The July earnings report was the first real wake-up call: a clean reaction, a break of the downtrend, and the start of relative strength returning to a name the Nasdaq actually needs.
Microsoft: The Technical Story
This is exactly why I take squeeze trades the way I do. When a name is consolidating in a squeeze, I get long while the price is consolidating, before it breaks out. I do not need to know the day it will fire, and I do not wait for the headline first. The whole point is to already be in before the news hits. That is what happened here. Microsoft spent weeks compressing after that post-earnings move; the squeeze was building, and then the Copilot launch landed on top of that setup. But guess what, this long set up is not over! At this point, MSFT is within a stone’s throw of previous, all-time highs. Those highs are my next target, and then I believe we will be onwards and upwards to my Fibonacci extension targets at $611, then $682.
Microsoft on Fox Business with Charles Payne
Price action is responding the way a leader should. Microsoft (MSFT) is ripping higher and pushing through the resistance that had been capping the weekly chart. You can see the breakout, the weekly squeeze flipping back to the bullish side, and the path toward prior highs on the weekly screenshot. With this resistance break, the path to new highs, as mentioned at the beginning of the month, is intact.
If you weren’t in this move already, I have some great news: I don’t think it’s over just yet. Why? Because we are heading directly into earnings season, and Microsoft is entering the Earnings Hot Zone.
Microsoft: The Rally into Earnings
Look at the Earnings Hot Zone screenshot. The next print is Q3 results on October 28, and we are heading into that window with a perfect beat streak and a strong gap last quarter. IV is still contained, which means the IV expansion is yet to come.
The current Five Star earnings rank on the overlay is only 2/5, so I am not treating this as a classic high-confluence Hot Zone setup, but I believe that pattern is reverting to its former 5/5 rank. I am treating it as a trend-continuation long into earnings, after a breakout. That distinction matters. The edge here is the weekly trend, the squeeze resolution, and the product catalyst, not a 5-star pre-earnings statistical overlay.
I am long MSFT in the Mastering the Trade room, and I will keep working that position as we grind into the October 28 report. First target remains the prior highs on the weekly chart. A weekly close back under the breakout zone would be the first reason to reduce.
Microsoft spent most of 2026 as the quiet Mag 7 name, but remember that when stocks are quiet, they are usually building energy for what is next: the breakout. Today’s Copilot launch and the weekly breakout are confirmation that the move is firing long.
And, we are just now entering the Hot Zone. That means there is more upside to be had!
Trade smart,
Danielle
VP of Options, Simpler Trading
