Chart of the Day: Microsoft's Earnings May Help Clear Things Up
Has the stock corrected enough or will the sellers hit the exits after earnings this week?Recent developments with CrowdStrike and outage have put heavy pressure on the shares.
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Perhaps we have arrived at the moment when Microsoft MSFT will be able to defend itself against the intense sellers that have hit the stock hard. The beautiful uptrend from June into early July has been destroyed and there is a big worry the stock may fall sharply from current levels. That concern is warranted and validated on the chart below.
There is some room left for the shares to fall if buyers do not like the earnings call Tuesday after the close. The April lows are about 10% to the downside. Money flow has retreated in recent days and shows a bearish trend. Further, stochastics are down and showing bearish momentum. In the top pane, price action is bearish (purple candles) and now the stock sits underneath the 200-day moving average.
The question is this: Has the stock corrected enough or will the sellers hit the exits after earnings this week? We think the stock eventually "rights" itself and starts moving up but in the short term it could be quite a volatile ride.
We rate Microsoft a Two in TheStreet Pro portfolio.
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At the time of publication, TheStreet Pro Portfolio was long MSFT.
