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  1. Home
  2. / Investing
  3. / Stocks

Microsoft Could Rally Further on AI Hype and China Mischief Fears

The charts of the software giant point to more upside to come for its shares.
By BRUCE KAMICH
May 25, 2023 | 08:45 AM EDT
Stocks quotes in this article: MSFT

Microsoft Corp. (MSFT) is higher in pre-market trading here on Thursday as it reports it will be incorporating generative AI into its platform. Also, the company warning that Chinese state-sponsored hackers attacked "critical" infrastructure organizations in Guam and the United States, as highlighted today by Stephen Guilfoyle in his Market Recon column, is helping to put a bid under Microsoft's shares and those of firms involved in cybersecurity. The race is on.

 
Let's take a look at the charts and indicators of MSFT ahead of the opening.
 
In this daily bar chart of MSFT, below, I can see a low in October and a retest in early January before price turned northward. MSFT now trades above the rising 50-day moving average line and the rising 200-day line. The trading volume has been more active since December, telling me that traders and investors have gained more interest in MSFT. The On-Balance-Volume (OBV) line shows some up-and-down improvement from early January. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has corrected modestly.
 
 
 
 
In this weekly Japanese candlestick chart of MSFT, below, I see a bullish picture. I do not see a top reversal or upper shadows to worry about. MSFT trades above the rising 40-week moving average line. The weekly OBV line is bullish and so is the MACD oscillator.
 
 
In this daily Point and Figure chart of MSFT, below, I can see an upside price target in the $412 area.
 
 
In this second Point and Figure chart of MSFT, below, I see the software is projecting a target of only $383. That could change.
 
 
Bottom line strategy: I offered a strategy for MSFT on April 24  and prices have moved above $296 to refresh the bull case. Longs should raise stops to $301. The $383 area is my price target now.
 
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TAGS: Investing | Stocks | Technical Analysis | Trading | Cybersecurity | Software & Services | Technology | China | Real Money | U.S. Equity

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