Microsoft (MSFT) at All-Time High After Blowout Quarter

Component Dow Microsoft Corporation (MSFT) is trading at an all-time high near $238 in Wednesday’s premarket, after beating second-quarter 2021 revenue and earnings estimates by wide margins and rising in the third quarter tips. Mr Softee posted earnings of $2.03 per share in the quarter, beating expectations of $0.62, while revenue rose 16.7% year-on-year to 43 $.08 billion, better than the consensus of $40.23 billion. Third-quarter revenue is now expected to exceed previous estimates by more than $2 billion.

Key points to remember

  • Microsoft announced much better than expected results for the second quarter of fiscal 2021.
  • The stock is trading at an all-time high ahead of the opening bell.
  • Price action could test the breakout in the regular session.
  • The bullish trend could reach $300 in 2021.

Azure cloud services grew 50% year-over-year, tied with 48% growth in Q1 and 47% in Q4 2020. Xbox revenue jumped 40% , which is not surprising, given the next-gen console. released during the quarter. Traditional products also saw decent metrics, with Office and LinkedIn products modestly increasing revenue while Windows OEM trailed, posting growth of just 1%.

Overnight rally lifted Microsoft stock above September resistance at $233 to an all-time high at $240.80. However, it pulls back before the opening bell, trading just four points above the breakout level, so bulls should wait for price action in the regular session before declaring victory. Accumulation readings hit new highs ahead of the earnings release, providing potential buyers with a tailwind in this buoyant January market.

Wall Street’s consensus on Microsoft is nearly immaculate, with a “Buy” rating based on 29 “Buy” recommendations, two “Overweight” and three “Hold”. No analyst is recommending shareholders reduce their position sizes or move to the sidelines at this time. Price targets currently range from a low of $220 to a high of $285, while the stock is expected to open Wednesday’s session around $12 below the midpoint target of $250. Sustained upside is possible with this modest investment.

Point

Accumulation generally refers to a position size in an asset that increases over several trades. Accumulation can also refer to the overall addition of positions to a portfolio. It can also refer to a general increase in the buying activity of an asset. In this case, the asset is said to be “in the process of accumulation” or “in the process of accumulation”.

Microsoft weekly chart (2013-2021)

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The stock breached the 2007 high at $37.50 in 2013 and entered an uptrend that made a round trip back to the 1999 high near $60 in 2016. The subsequent breakout quickly unfolded. transformed into a rising channel pattern and held within those limits in a 2017 channel breakout. The rally broke above $115 in the fourth quarter of 2018, giving way to an intermediate correction which hit an eight-month low at the end of the year.

A strong wave of recovery reached the previous high in March 2019, resulting in an immediate breakout that stalled at $190.70 in February 2020. The stock fell 30% in March and rallied on the same trajectory, breaking out again in June. This buying impulse stalled at $232.86 in September and turned into symmetrical triangle pattern, increasing resistance (upper black line) before the confessional this morning.

Breakouts Above September High and Triangle Resistance Established Support levels at $233 and $225. A pullback to the lower level would provide a more rewarding entry, ahead of positive price action that could easily reach $300 in 2021. Conversely, a breakdown at $225 would signal failure, increasing the chances of an intermediate top and of a correction of several months. within 200 days exponential moving average (EMA), now rising to $202.

Point

A symmetrical triangle is a chart template characterized by two converging trend lines connecting a series of peaks and troughs. These trend lines should converge to a roughly equal slope. Trend lines that converge at unequal slopes are called a rise. cornerdescending corner, ascending triangle or descending triangle.

The essential

Microsoft blew up quarterly earnings estimates and is trading at a record high on Wednesday morning.

Disclosure: The author held no position in the aforementioned titles at the time of publication.

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