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Microsoft Corporation (MSFT)

Microsoft stock forecast: buy or sell

Close on Oct 23rd, 2020
$216.23 +0.62%
3 months performance
6.50%
Published: October 25th, 2020 - 5.27pm EDT

Microsoft stock outlook

  • Microsoft stock merely changed 0.62% to close at $216.23 on the stock market today, after 4 consecutive sessions in negative.
  • Microsoft is presenting its earnings report on Tuesday next week
  • From the chart point view, price is drawing an scaled downtrend since early September with lower tops and lower bottoms. this downtrend marked a -7.14% loss.
  • Barclays published a bullish rating for Microsoft on Friday, with a target of $249.00
  • Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide.

Disclaimer:
The opinions given in this post are personal and not recommendations for you to buy or sell shares. The author of this article does not have an understanding of the particular conditions of the reader, his or her own finances or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Thoughts are provided for educative motives only

Microsoft stock charts

Should I buy Microsoft stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is $MSFT stock a buy?

Currently, Microsoft stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean we expect a selloff for $MSFT in the next few days, or that it may not rise higher. Simply, it doesn't match our recommended trading systems

Should I sell Microsoft stock?

When you are a novel trader and you own a stock with some profit, it's really hard to decide the correct moment to sell and get your benefits. Much like when we have to buy shares, deciding when is appropiate time to sell is not a random decision, and we must adhere our own trading strategy. When selling, as well as buying, detailed strategies are very simple to use but are only applicable for selling shares in your porfolio, not for selling short $MSFT stock

As a rule of thumb, you must never mantain a trade that shows a losses greater than those expected upon the buy. When to sell your stock always has to be dictated by the stop-loss (automatic or manual)

Is it time to sell Microsoft stock?

Currently, Microsoft stock doesn't match any of our preferred sell setups, so if you hold Microsoft shares and your operation is in profit probably is not time to sell now

Analysts' recommendations to buy or sell Microsoft stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last 30 days, 11 analyst ratings were published for Microsoft. General sentiment is bullish, with 10 out of 11 publishing optimistic forecasts

Microsoft ratings

Brokerage firmRating
Sep 29th, 2020
Royal Bank of Canada Strong buy
Sep 29th, 2020
Summit Insights Strong buyNeutral
Oct 5th, 2020
Credit Suisse Group Strong buy
Oct 12th, 2020
Deutsche Bank Aktiengesellschaft Strong buy
Oct 13th, 2020
Royal Bank of Canada Buy
Oct 14th, 2020
UBS Group Strong buy
Oct 15th, 2020
Mizuho Strong buy
Oct 19th, 2020
Jefferies Financial Group BuyStrong buy
Oct 20th, 2020
Goldman Sachs Group Strong buy
Oct 20th, 2020
Stifel Nicolaus Strong buy
Oct 23rd, 2020
Barclays Buy

Technical analysis

Microsoft continues in downtrend since early September, and has droppped a -7.14%. The stock drew 2 consecutive lower tops

SMAs overview

A favorite tool of many traders are the moving averages, that easily show market direction. A moving average is the average price of a stock over a set period of time. Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days. Learn more about Moving Averages from sources like Wikipedia and Investopedia

MSFT SMAs chart

Supports and resistances

Investors use supports and resistances as a way to spot price points in the stock price action that tend to act as glass ceiling, containing the price of a stock to move in certain direction. A support level is a level where the price tends to stop as it falls. Price is more likely to "bounce off" this level rather than break through it. Nevertheless, if the price breaks down this level, it will probably continue falling until meeting another support level. On the contrary, resistance levels are where the price may find opposition as it moves up. In the same way, this means that the price is more liable to "bounce off" at this level, and if it finally breaks this level, the price will rise easily until it meets the next resistance

The current resistances are:

  • R1: $217.12 (0.41% above)
  • R2: $225.21 (4.15% above)
  • R3: $232.86 (7.69% above)
  • The current support levels are:

  • S1: $215.86 (-0.17% below)
  • S2: $202.65 (-6.28% below)
  • S3: $197.03 (-8.88% below)
  • Bollinger bands

    So-called Bollinger bands are a well-known technique that was created by John Bollinger. Fundamentally, the Bollinger Bands are lines that flow around a moving average, varying the distance from the bottom to the top depending on market volatility. They are usually plotted by an interval of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Since the price surpassed the upper band on October 13, the price has corrected downwards by 3.99%

    MSFT RSI chart

    Relative strength index

    The RSI (Relative Strength Index) is an oscillator-type indicator that track price movements to detect when the share or financial asset is overbought or oversold. Like other oscillation indicators, the RSI moves between 0 and 100. J. Welles Wilder introduced the relative strength indicator in the late 1970s and since then it has been widely used by investors

    The RSI dropped below the overbought level of 70 in early September after just crossing to the overbough zone for a single day (weak signal). The RSI value on Friday was 53.96. Since that level was lost, Microsoft price tanked a 6.66%

    MSFT RSI chart

    Earnings and financials

    Microsoft ($MSFT) is releasing earnings report on Tuesday next week. Analysts predict an earnings per-share of $1.54 and sales of $35.7 billion.

    Earnings reporting day has an additional risk for investors as the information disclosed can gap up or down the stock price with exceptionally low volume and not respecting your buy or stop-loss orders. Check company's website to confirm time and details on the earnings call and the earnings report.

    In mid-July, Microsoft Corporation ($MSFT) posted EPS for fiscal fourth-quarter that slightly improved Wall St. expectations. Quarterly EPS was $1.46 per share instead of $1.34. This quarterly report represents an earnings surprise of 8.96%.

    Same quarter last year, reported EPS was $1.51, so recently reported EPS is a decrease of -3.31%.
    MSFT revenues and profits chart