Chart of the Week: Microsoft
Let’s take a look at big software company, Microsoft; MSFT is the symbol. So let’s take a look at this chart here. It’s kind of attractive right now.
We see a big decline here. The stock found a low here just below the 100 day moving average, which is this gold line right here. It bounced back sharply – right back up to all-time highs around the middle or late part of May.
Recent pullback is constructive
This recent pullback here is constructive. It came back down to this lower Bollinger band, and now it’s making another rise back up here. A stair step case of higher highs and higher lows, which is our textbook definition of an uptrend.
We see a nice positive move in money flow as well, too. What I also like to see here in the MACD is a crossover here. Once it’s confirmed – would be confirmed probably in the next day or two – we’ll see that indicator on a buy signal.
Notice also that the relative strength has been steadily moving upwards. It is not overbought yet. It’s making an attempt to get up there. Once it exceeds this old high back in May, we think it has some room to run to about $465 to $460 before it gets overbought.
Strong heavy turnover on this one day at the end of May when the stock planted a low in the chart.
So, all’s good here with Microsoft. They don’t have earnings coming out until later in July. We’ve got another seven weeks until the next earnings report season comes around.
I do like the fact that this stock is holding up nicely here with a lot of the other Mag 7 names. There aren’t very many of them that are at or near all-time highs, save for NVIDIA and Apple. Certainly, Microsoft is holding its own, and this stock has got some legs here.
Watch for the stock breaking out of this range
The only thing you could certainly argue about the chart here is that it’s been trading in a range for about four, four and a half months. It’s built a nice base in the upper end of the range, so when it does up and break out, it’s got some legs to go.
As Louise Yamada, a famed technician, likes to say, “The longer the base, the higher the space”. Which means that the longer there is a base the stock is being built, the higher the moves when it does actually break out.
So that’s Microsoft!
Don’t miss a single one of Bob’s charts! Get the Chart of the Week in your inbox every week!
