Microsoft (MSFT) saw a 7% gap up following its earnings report in May.
To fill this gap, the stock would need to drop about 28.59% from its high, or 23.33% from the current level.
Historically, gaps on the monthly chart have eventually been filled, so it’s reasonable to assume that this one might be as well in the long term.
However, given that MSFT is one of the top three companies by market capitalization, a decline of more than 20% would likely trigger a broader correction across the Nasdaq index.
Therefore, this potential gap fill should not be seen merely as an individual stock event, but rather as part of a broader market correction scenario.
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