MSFT took a hit following the release of the earnings report this week and is now trading just off the bottom of a channel it has been in since August. Price has been in a kind of consolidation mode on the lower time frames since the release. On the daily chart, we see that red days have relatively high-volume spikes, the MACD has turned negative, and RSI is nearing oversold levels. The fact that price has not continued to drop following the initial post-earnings drop, indicates it might stabilize at this level. My hunch is that it will consolidate and maybe approach the lower band of the channel, and then start climbing. There is some pressure on tech stocks at the moment, and there is an election next week, so might be a bit of rough sailing ahead. My gut tells me MSFT will bounce back, and I am long. As for target I would set my eyes on the upper band of the channel and consider a breach to the downside of the channel as a red flag. To quote ChatGPT:
To provide a well-rounded summary of Microsoft's latest earnings report, I would highlight:
1. Revenue Growth: Microsoft reported notable revenue increases, driven by its cloud and AI segments.
2. Azure's Performance: Strong growth in Azure and AI services reinforces Microsoft's competitiveness in the cloud space, a vital area given current industry trends.
3. AI Investment: Increased spending on AI research and development reflects the company’s focus on leveraging AI as a growth driver.
These elements can positively impact Microsoft’s outlook, appealing to investors prioritizing innovation and digital transformation.
Trade closed: target reached
Price reached the upper band and I chose to close my trade, as I think MSFT has been slow lately. That being said, it could also finally be breaking out and keep pushing up. I will however see how it develops, and see if resistance will push it back once again.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.