Shares of Microsoft Corp (MSFT) were rated a new buy at a sell side firm Wednesday with a $370 price target. In our April 1 review of MSFT we wrote that "Traders should avoid the long side of MSFT. Weakness back below the 50-day and 200-day moving averages is likely to precipitate further declines." Let's check the charts again.
In this daily bar chart of MSFT, below, we can see that prices have been weak since early April. MSFT traded down to a low around mid-June. Prices tested the underside of the declining 50-day moving average line the other day and so far the line acted as resistance. The slope of the 200-day line is negative.