Microsoft Rebounds Despite Earnings Miss. Here’s How To Trade The Stock Now.

Microsoft

MSFT
traded as low as $244.00 in after-hours trading on Tuesday, July 26 after missing earnings and revenue estimates. This is not seen on today’s daily and weekly charts. The stock traded as low as $241.51 on June 14. The stock opened this morning above its monthly and weekly pivots at $256.83 and $247.44. The next upside target is the annual pivot at $274.58.

The stock has been below a death cross on its daily chart since March 15, 2022. The weekly chart becomes positive on a close on Friday above its five-week modified moving average at $263.21.

Microsoft has a p/e ratio of 28.32% and a dividend yield on 0.96%, according to Macrotrends. On Tuesday, they reported earnings of $2.23 per share versus the estimate of $2.29. They had beaten earnings-per-share estimates in twenty-four consecutive quarters. The technology giant paid-out a dividend of $2.48 per share on July 25.

The Daily Chart for Microsoft

The daily chart for Microsoft shows a bear market decline from its 52-week high of $349.67 set on November 22, 2021. The decline was to $241.51 on June 13, 2022.

The 50-day simple moving average was rising with the stock until it failed to hold on January 4, 2022. The stock declined to its 200-day simple moving average at $292.78 on January 24. This key moving average was a magnet moving higher to $304.33 on April 6, 2022, when it failed to hold.

The stock gapped lower on April 11 and stayed below its 50-day SMA until June 24 when this average became a magnet. Today this average is $260.27 with the stock above it.

Today the 50-day and 200-day SMAs are $260.27 and $295.84. The horizontal lines from top to bottom are the semiannual pivot at $325.11, the annual pivot at $274.58, the monthly pivot at $256.83, and the weekly value level at $247.44.

The Weekly Chart for Microsoft

The weekly chart for Microsoft will be positive given a close on Friday, July 29 above its five-week modified moving average at $263.05. The stock is well above its 200-week simple moving average, or ‘reversion to the mean’ at $206.26.

The 12x3x3 weekly slow stochastic reading is rising at 37.48. This measure scales between 00.00 and 100.00 where readings above 80.00 are overbought and readings below 20.00 are oversold.

Trading Strategy: Buy Microsoft on weakness to the monthly value level at $256.83. Reduce holdings on strength to annual pivot at $274.58.