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Category: Microsoft (MSFT) and Technical Analysis
Date: 14 July 2020 Stock Price of Microsoft: $207.07 The stock price of Microsoft (MSFT) has increased by 337.5% over the last 5 years. A very handsome return provided to stockholders. The question is what is next for Microsoft (MSFT) stock? Where is it heading over the short and longer term?
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While over the 5 year period the stock of Microsoft increased by a very strong 337.5%. No stockholder will ever say no to these types of returns. But the question is where to from here for the stock of Microsoft (MSFT)? Below we do some technical analysis on Microsoft stock price in order to determine the most likely route MSFT stock is to take in coming weeks and months."
More About Microsoft (MSFT)
Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. We strive to create local opportunity, growth, and impact in every country around the world. Our platforms and tools help drive small business productivity, large business competitiveness, and public-sector efficiency. They also support new startups, improve educational and health outcomes, and empower human ingenuity.
We continue to transform our business to lead in the new era of the intelligent cloud and intelligent edge. We bring technology and products together into experiences and solutions that unlock value for our customers. In this next phase of innovation, computing is more powerful and ubiquitous from the cloud to the edge. Artificial intelligence (“AI”) capabilities are rapidly advancing, fueled by data and knowledge of the world. Physical and virtual worlds are coming together with the Internet of Things (“IoT”) and mixed reality to create richer experiences that understand the context surrounding people, the things they use, the places they go, and their activities and relationships. A person’s experience with technology spans a multitude of devices and has become increasingly more natural and multi-sensory with voice, ink, and gaze interactions.
We continue to transform our business to lead in the new era of the intelligent cloud and intelligent edge. We bring technology and products together into experiences and solutions that unlock value for our customers. In this next phase of innovation, computing is more powerful and ubiquitous from the cloud to the edge. Artificial intelligence (“AI”) capabilities are rapidly advancing, fueled by data and knowledge of the world. Physical and virtual worlds are coming together with the Internet of Things (“IoT”) and mixed reality to create richer experiences that understand the context surrounding people, the things they use, the places they go, and their activities and relationships. A person’s experience with technology spans a multitude of devices and has become increasingly more natural and multi-sensory with voice, ink, and gaze interactions.
Microsoft (MSFT) stock price history over the last 5 years
The image below shows the stock price history of Microsoft over the last 5 years. And its been a very very good time for Microsoft (MSFT) stockholders with the stock of Microsoft increasing by 337.5% over the last 5 years
While over the 5 year period the stock of Microsoft increased by a very strong 337.5%. No stockholder will ever say no to these types of returns. But the question is where to from here for the stock of Microsoft (MSFT)? Below we do some technical analysis on Microsoft stock price in order to determine the most likely route MSFT stock is to take in coming weeks and months
Technical Analysis of Microsoft (MSFT) stock price
While there are many different technical analysis indicators we tend to follow the principle of keeping things simple. The KIS principle. So we will take a look at the shorter term moving averages and the longer term moving averages as well as the Relative Strength Index (RSI). So let's focus at the longer term moving averages first. The image below shows the stock price of Microsoft (MSFT) as well as its 50 day and 200 day moving average as well as the RSI for Microsoft
From the image above, one can see that the RSI is above the midpoint of 50, but below the 70 mark, which is an indicator of a stock being overbought (basically it is due for a correction). So the RSI is not providing a definitive sign of where the stock is heading, but since it touched 70 relatively recently and has pulled back from there we believe the stock of Microsoft is in a correction phase right now which could signal further stock price weakness in coming weeks.
Turning our attention to the moving averages one can see the 50 day moving average is well above the 200 day moving average (which is a positive sign for a company's stock price). If the 50 day moving average crosses below the 200 day moving average it is a negative sign and indicates potential stock declines. From the image above one can see the 50 day moving average is far away from the 200 day moving average. But since the RSI has been coming down recently and its pointing to a potential further decline in the stock of Microsoft the question is how far will it fall, if it falls? The 50 day moving average and 200 day moving average also shows medium and long term support levels for a stock price. So should MSFT stock decline more it is expected to find medium and longer term support at the following prices:
As we mentioned 50 day and 200 day moving averages are longer term technical indicators, so let's take a look at shorter term indicators. The image below shows the stock price of Microsoft (MSFT) as well as its 10 day and 30 day moving average as well as the RSI for Microsoft (MSFT)
Turning our attention to the moving averages one can see the 50 day moving average is well above the 200 day moving average (which is a positive sign for a company's stock price). If the 50 day moving average crosses below the 200 day moving average it is a negative sign and indicates potential stock declines. From the image above one can see the 50 day moving average is far away from the 200 day moving average. But since the RSI has been coming down recently and its pointing to a potential further decline in the stock of Microsoft the question is how far will it fall, if it falls? The 50 day moving average and 200 day moving average also shows medium and long term support levels for a stock price. So should MSFT stock decline more it is expected to find medium and longer term support at the following prices:
- 50 day moving average: $191.28
- 200 day moving average : $165.64
As we mentioned 50 day and 200 day moving averages are longer term technical indicators, so let's take a look at shorter term indicators. The image below shows the stock price of Microsoft (MSFT) as well as its 10 day and 30 day moving average as well as the RSI for Microsoft (MSFT)
In a similar vein to the approach to the longer term analysis, if the 10 day moving averages crosses over above the 30 day moving average it is a positive sign for a stock and if the 10 day moving average crosses below the 30 day moving average its a negative sign for a stock price. At this point the 10 day moving average is trading at well above the 30 day moving average (a positive sign). But since the RSI is indicating potential further declines the question is over the shorter term period where are the support levels for Microsoft's stock price?
So should Microsoft (MSFT) stock be in for a correction as the RSI indicates, the first support levels will be the shorter term levels shown above. If the stock falls below these support levels the next support levels will be the 50 day and 200 day moving average levels.
Thus if the stock of Microsoft decides today to start its decline we will see the following levels as support levels for Microsoft (MSFT)
- 10 day moving average: $207.98
- 30 day moving average: $197.24
So should Microsoft (MSFT) stock be in for a correction as the RSI indicates, the first support levels will be the shorter term levels shown above. If the stock falls below these support levels the next support levels will be the 50 day and 200 day moving average levels.
Thus if the stock of Microsoft decides today to start its decline we will see the following levels as support levels for Microsoft (MSFT)
- 10 day moving average: $207.98
- 30 day moving average: $197.24
- 50 day moving average: $191.28
- 200 day moving average : $165.64