Microsoft Corp. (MSFT) is the 'Stock of the Day' at Real Money this Friday. Last night Microsoft EPS beat by $0.16 and beat on revenues. Ahead of the opening today, prices were up about 2%. We reviewed the charts and indicators of MSFT on Monday, and wrote that, "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."
Let's look at the latest charts and indicators to see if anything has changed.
In this daily bar chart of MSFT, below, we can see that prices dipped in the past few days but they still remain above the rising 50-day moving average line. The slower-to-react 200-day line still has a positive slope.
The daily On-Balance-Volume (OBV) line has been stalled from late June and the Moving Average Convergence Divergence (MACD) oscillator has been in a take profits sell mode from late June.
In this weekly bar chart of MSFT, below, little has changed from Monday. Prices are above the rising 40-week moving average line. The weekly OBV line is neutral and the MACD oscillator has continued to narrow slightly.
In this Point and Figure chart of MSFT, below, we still see the possible upside price target of $174 but a rally and trade at $140.77 is needed to refresh the uptrend.
Bottom line strategy: MSFT is poised to open higher this morning but the chart and indicators have not changed much from Monday. I believe that traders should tread carefully with new positions.