Chart of the Day: Microsoft Is Springing Forward Ahead of Earnings
The company will report third-quarter earnings Wednesday night and by all accounts they should beat by a mile.
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When your stock is boosted just prior to earnings from several analysts and the rest of them play "leapfrog" (one better than the other), then you know something good is about to happen. Such is the case for Microsoft MSFT. The chart showed trouble in early October as the stock swooned badly while the rest of the market pushed higher.
But some analyst upgrades and earnings adjustments higher did the trick in turning the stock around. Notice just about two weeks ago the heavy turnover with the stock having a remarkable day (vertical line in top pane). Microsoft followed through on that session and has been moving toward the September high ever since.
Today that level is being challenged, and if earnings Wednesday night are taken positively then we likely see the old highs from July ($469) coming into view very quickly.
The indicators are looking bullish. Moving Average Convergence Divergence (MACD) is on a buy signal. Since early October the parabolic SAR (stop and reverse) has been on a buy signal too, which tells us a change in trajectory of price before it happens, not after.
We see good strength in the stochastics as well, showing this stock has rocket-fueled momentum. If Microsoft can clear and confirm about $470, we believe a move to $500 would be imminent.
We like Microsoft and rate it a Two in TheStreet Pro Portfolio.
At the time of publication, TheStreet Pro Portfolio was long MSFT.
