Is a Breakout for Microsoft in the Charts? A resistance line has formed in the chart of Microsoft Corp. (MSFT). The stock appears to be heading towards this level. If it breaks through, a breakout is expected to...

By Christian Tharp

This story originally appeared on StockNews - StockNews

A resistance line has formed in the chart of Microsoft Corp. (MSFT). The stock appears to be heading towards this level. If it breaks through, a breakout is expected to occur. Read more to learn how to profit from this trade.

Microsoft Corp. (MSFT) is known for its Windows operating systems and Office productivity suite. The firm dominates the PC software market with more than an 80% market share for operating systems. It also designs and sells PCs, tablets, gaming and entertainment consoles and its Azure cloud-based solutions provide customers with software and services.

The company's Azure cloud solution has been benefiting from an acceleration in the global digital transformation. In addition, its Teams' offering has grown due to a continuation of remote work and an adoption of the hybrid/flexible work model. Plus, the recovery in the job market has boosted LinkedIn revenues.

MSFT has a current ratio of 2.1, which indicates it has more than enough liquidity to handle short-term obligations. The company also has a low debt-to-equity ratio of 0.5. This has led to a Quality Grade of B in our POWR Ratings system. Earnings per share have grown an average of 49% per year over the past three years.

The stock appears a bit overvalued with a forward P/E ratio of 32.36. MSFT had been showing bullish momentum from June through the end of August. After negative performance in September, the stock has reversed course as shown in the chart below.

Take a look at the 1-year chart of MSFT below with added notations:

Chart of MSFT provided by TradingView

MSFT has been in a steady trend higher for most of the year and recently ran into trouble at the $305 level (red). That mark was tested as resistance multiple times before the stock finally gave up, along with the overall market decline. Now that MSFT, adn the market, has begun to rebound, it may be time for new highs in the coming weeks. The ideal long position in the stock would be on a breakout above the $305 level, with a protective stop placed below the entry point.

Click Here to Read the Greatest Trading Book Ever Written

Want to Discover More Great Trades?

What is better than finding the 1 attractive stock in this article?

Discovering 5 timely the ones in this new special report. Click below to claim your free copy now!

5 Stocks Ready to BREAKOUT!

MSFT shares rose $2.44 (+0.83%) in premarket trading Thursday. Year-to-date, MSFT has gained 33.82%, versus a 18.51% rise in the benchmark S&P 500 index during the same period.

About the Author: Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.


The post Is a Breakout for Microsoft in the Charts? appeared first on

Editor's Pick

Related Topics

Business News

'It's Getting Worse By the Week': Kevin O'Leary Issues Grave Warning About Commercial Real Estate Industry

The "Shark Tank" star spoke to impending devaluation of stocks in the industry on FOX Business' "Varney & Co."

Business News

These Great-Grandparents Booked 51 Back-to-Back Cruises Because It's 'Cheaper Than a Retirement Home'

Retirees Marty and Jess Ansen hopped on a cruise ship nearly two years ago and never left.

Business News

Walgreens' Battle Over High-Tech Cooler Doors Heats Up

The lawsuit, initially filed in June, is seeking $200 million in damages.

Business News

'Beware': Tom Hanks Warns of AI Danger After Advertisement Uses His Likeness Without Permission

The actor shared a screenshot of the false advertisement to his 9.5 million Instagram followers.

Money & Finance

Want to Become a Millionaire? Follow Warren Buffett's 4 Rules.

Too many entrepreneurs are counting too heavily on a company exit for their eventual 'win.' Do this instead.