• Microsoft storms to a new all-time high on Monday

• Momentum indicators are within their overbought zones

• Suggesting elevated possibility of a correction

Microsoft’s shares have been in a steady advance since their September bottom of 309.35, generating a series of new record highs in the last few sessions. Given that the short-term oscillators are hinting at overbought conditions, traders should be aware of the increasing risks of a pullback.

If the uptrend resumes and the price moves to uncharted waters, initial resistance could be found at 379.98, which is the 123.6% Fibonacci extension of the 366.49-309.35 downleg. A break above that region could open the door for the 138.2% Fibo of 388.32. Even higher, the 161.8% Fibo of 401.80 could curb further upside attempts.

On the flipside, should the stock reverse lower, the bears could attack the July peak of 366.49, which also acted as support in November. Falling below that hurdle, the price might face the 78.6% Fibo of 354.26. If that barricade also fails, the spotlight could turn to the 61.8% Fibo of 344.66.

In brief, Microsoft’s stock has been on a streak of fresh record highs lately, but its rally is starting to look overdone. Is there a downside correction in sight?