Microsoft shares have recently made a sharp gap down from the $47/share area to $43/share, but it looks like support around the recent lows is holding. With that, price could regain ground and possibly fill the gap if the rallies are extended.
US equities have performed better in the past few days, as the latest jobs release indicated a strong recovery. The NFP reading showed a higher than expected increase in hiring, which renewed talks of a Fed rate hike sometime this year.
Microsoft Shares Outlook
The rally could still find resistance at the long-term 200 simple moving average, which might hold as a dynamic inflection point. Further gains past this area could reach until the broken support around $45/share.
For now, the short-term 50 SMA is moving above the 200 SMA, suggesting that the uptrend could carry on. A downward crossover, however, would confirm that further losses are possible.
MACD has already reached the oversold area and is starting to turn up, indicating a potential return in buying momentum. RSI is also moving higher but showing a bit of hesitation among buyers.
A selloff from the current levels could mean another test of support around $41/share or perhaps the creation of new lows if risk aversion returns to financial markets. There are no major economic reports due from the US economy this week, suggesting that market sentiment might also be responsible in directing price action for Microsoft shares.
Investors in Microsoft shares are hopeful that price could regain ground soon, although traders seemed to react negatively to the company’s latest earnings report. With that, the recent drop could offer a good opportunity to buy the stock at a much cheaper price, as the company is still working on repositioning its products, particularly in the cloud computing sector.
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