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- Technical Analysis
Microsoft Technical Analysis - Microsoft Trading: 2021-12-10
Microsoft Technical Analysis Summary
Above 336.37
Buy Stop
Below 330.37
Stop Loss
| Indicator | Signal |
| RSI | Neutral |
| MACD | Neutral |
| Donchian Channel | Buy |
| MA(200) | Buy |
| Fractals | Buy |
| Parabolic SAR | Buy |
Microsoft Chart Analysis
Microsoft Technical Analysis
The technical analysis of the Microsoft stock price chart on 4-hour timeframe shows #S-MSFT,H4 is rebounding above the 200-day moving average MA(200) after retreating to 6-week low a week ago. We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 336.37. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the fractal low at 330.37. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (330.37) without reaching the order (336.37), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Fundamental Analysis of Stocks - Microsoft
Microsoft stock retreated as CEO Satya Nadella sold 840,000 of company shares in the end of November. Will the Microsoft stock price continue rebounding?
Microsoft is one of the largest companies on earth. CEO Satya Nadella sold 840,000 shares, more than half of his entire stake in the company in the end of November. Microsoft’s stock suffered a decline after Nadella sold this holding. Analysts estimate Microsoft can generate nearly $197 billion in revenue this year. Its stock is up about 50% over the past 12 months. And many point to the fact that the valuation has become inflated. Thus, Microsoft has traded at an average price-to-earnings (P/E) ratio between 25 and 26 over the past decade. The estimates for 2021, implying the software giant will earn approximately $9.20 per share, result in P/E ratio of 35 - 37% higher than Microsoft's historical average. And analysts estimate the company’s earnings per share (EPS) will grow at 12% average rate over the next three to five years. The EPS growth rate for the past decade has been 11.5% each year on average. And these estimates imply the stock is trading at a 30%-plus premium on valuation which cannot be justified by the estimated 12% uptick in growth. However, the current setup is bearish for the stock price.
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