Some market watchers call Microsoft Corp. (MSFT) old tech, but it has been rallying since late December like new tech. Let's review the charts and indicators this afternoon.
In this daily bar chart of MSFT, below, we can see the impressive performance this year for MSFT -- from below $95 in late December to just shy of $140 this month. Prices are above the rising 50-day moving average line. The 200-day line shows a positive slope the past 12 months, but is well below the price action, and prices could be considered extended.
The On-Balance-Volume (OBV) line made a low in late December and its six-month rise supports the bull story, with signs of aggressive buying. The 12-day price momentum study in the lower panel shows a lower high from June to July for a bearish divergence vs. the price action. This is not a large divergence, but it is a divergence never the less.
In this weekly bar chart of MSFT, below, we can see a smooth and steady advance over the past three years. Recently, the volume pattern and the weekly OBV line have not kept up with the price action. The 12-week price momentum study shows weakening momentum since April.
In this Point and Figure chart of MSFT, below, we can see a potential price target of $174 projected. A decline to $132.61 will weaken this chart.
Bottom line strategy: MSFT could continue to impress on the upside, but a break of the late June lows will weaken the chart. Tread carefully with new positions.
Microsoft is a holding in Jim Cramer's Action Alerts PLUS member club.