Market Analysis

Is it time to buy Microsoft? Yes and No.

Over time, Microsoft has been one of the few companies to outperform the US SP500 index several times in terms of returns. This is because the company can aggressively increase both sales and profits. Investors appreciate this reliability and factor it into their calculations.


The company’s products have become widely accepted in the market and are known for their reliability, which makes it possible for Microsoft to generate recurring revenue streams without having to react to the competition with very capital-intensive measures.


From a chart technical point of view, everything is still in the green. After Christmas last year, the price showed an upward trend, with a brief interim recovery. On a daily basis, the MACD is in positive territory. The MACD is above its trigger line. So also in the bigger picture. On a weekly basis, the MACD is in positive territory, and the histogram is above its zero line. The MACD has crossed its trigger line from bottom to top.


However, there may be signs of a recovery in the short term. On a daily basis, the indicator could turn in soon and approach its trigger line. The histogram is already showing declining tendencies. The area around USD 110.80 could be decisive for the next price development.


If the bulls are too weak and the bears take command, the area at 108.65 and the zone at 106 USD should provide support. Note to the bullish trend line, which currently runs just below the 101.50 support. If the market breaks through this, downwards, the last defence line around the USD 97 will decide whether the market is merely showing a correction or going into consolidation.


However, if the bulls manage to keep the market above the 110.80 area, then the first resistance might wait in the 115.80 range. If the market breaks through these levels, it will negate the old 2018 highs and new highs may be possible. Resistance could be in the 119.50 USD and 124.20 USD range.

MSFT.US - Daily Chart. | Source: ActivTrader

MSFT.US Daily Chart | Source: ActivTrader


Written by Daniel Schuetz, External Analyst


*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at its own risk.