Why is Microsoft Stock $MSFT dropping hard?

Microsoft just did what every impatient trader hates… after a massive rally, the candles are shrinking, emotions are rising, and here comes the correction everyone said ‘couldn’t happen.’ Today I’ll show you—using pure supply and demand—why MSFT is being magnetically pulled back into the monthly demand imbalance like a toddler to a candy shop. No fundamentals, no drama… just price action, imbalances, and patience. Let’s dive in.

Microsoft Monthly Supply & Demand Analysis

After Apple’s strong monthly correction setup, Microsoft (MSFT) is showing the exact same pattern — but even cleaner.

This is what I love when I teach traders to learn to trade stocks using pure price action and supply and demand imbalances. You don’t need news, earnings, or any guru opinion — everything is already priced in at the higher timeframes. Just like I explained in the Supply and Demand Free Course , the bigger timeframes tell you what the professionals already did months ago.

Let’s break it down.

Candles Shrinking = Momentum Weakening

Fast-forward to mid/late 2025:

- The wide-bodied candles disappeared
- Small-bodied candles appeared
- Then came the big bearish candle

This is classic momentum decay. This is exactly when most traders start acting emotionally:

- They zoom into 5-minute charts
- Their IQ drops by 50 points
- They forget the trend
- They forget the imbalance
- They become chart zombies

But price action never lies — we’re simply seeing exhaustion after a massive markup.