Chart of the Day: Is Microsoft Priced for Perfection?
The stock has come a long way since April but continues to power up.
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No question the trend in Microsoft MSFT has been in place for months. A series of higher highs, higher lows on the chart is our textbook definition of an uptrend, and looking back at the last earnings release in April the stock has been on a nonstop rise on strong volume. That is telling us big money continues to pile in on every opportunity, mostly the dips.
But with earnings coming out this week and Microsoft at all-time highs could there be some damage following the release? After all, MSFT is up more than 25% since the last earnings report and really never missed a beat. The company put up an extraordinary beat on the top/bottom line last quarter, and we think the bar has been raised significantly this time around so we should not expect to see a big gap-up move like in April.
We have tempered our expectations for the stock to move as it may just go sideways for a bit, and that might actually be okay. Stochastics have dipped (pane 4) but are trying to get back to bullish, money flows have been leaking lower but the candles remain blue, which is bullish on the GoNoGo composite of indicators. So, we err on the side of caution but remain bullish.
We like Microsoft in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
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At the time of publication, TheStreet Pro Portfolio was long MSFT.
