Microsoft: resistance breakthrough?

Microsoft: resistance breakthrough?

2021-01-26 • Updated

Microsoft is about to report its quarterly earnings on January 27, at 00:30 MT time.

The expected EPS is $1.61 against $1.51 for Q4’2019. Apart from total revenue and other general indicators, that’s the main figure most investors will be looking at. What does its stock performance look like?

Tactically, it’s been trading under the resistance of $230 since August. While the local lows have been gradually moving upwards in line with the 50-MA and 100-MA, the resistance hasn’t. That suggests the accumulation of bullish potential that would eventually break the resistance of $230. The question is when. Technically, the “logic of the triangle” still requires one or two downswings before the flat upper side gets broken. However, if Microsoft reports good Q4’2020 results that beat the market expectations, there is a high likelihood that the price will go above $230.

MICROSOFTDaily1.png

Strategically, while the overall trajectory of the price performance is definitely an upward curve, every now and then it gets down to dip into the 50-MA. Currently, it is considerably above the Moving Average. That begs the question: will it dip again? Very possibly, and it has nothing to do with the quarterly report. The stock may break the resistance of $230 and then plunge, or just plunge. The thing is, the growth of a stock value is like a machine engine: it gets overheated by the constant expansion and needs to cool off sometimes. That may not happens in months from now – or, it may happen quite soon. Watch for the signs of reversals and look into the details of the quarterly report.

MICROSOFTWeekly.png

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