Microsoft shares have shown a strong rally recently after dipping below the 50 simple moving average and regaining ground. MACD is still moving higher, confirming that there could be more upside for the stock price.
RSI, on the other hand, is reflecting overbought conditions. A selloff at the next resistance level around the $50/share level might take place if the buying momentum is not sustained.
Microsoft Shares Forecast
The uptrend for Microsoft shares seems strong, as price has been bouncing off the 50 SMA previously. Apart from that, the short-term SMA is still moving above the longer-term 200 SMA, which confirms that the uptrend could carry on.
Further gains past the $50/share level could indicate that Microsoft shares might keep climbing until the end of the year. On the other hand, another break below the 50 SMA support or the $45/share area could indicate that a reversal is possible.
The company itself seems to be overhauling its operations as a new CEO has been appointed with a new focus on cloud functionalities. These offerings seem to have been taken positively by investors as it could spark stronger demand for the Microsoft shares if sufficient progress is made in the coming months.
“The core products of this company are Windows, Office 365, and Azure,” Nadella told a small gathering of journalists and analysts at Microsoft’s headquarters in Redmond, Washington, last week. “From a business model, those are the three big things we are very focused on. We ask how our effort is accruing to those things.”
Apart from that, the positive sentiment for the US economy is helping support equities, as the Fed recently confirmed that improvements in labor and inflation can be seen. Although the central bank is committed to keeping rates low for a considerable time after easing ends, the strong data from the economy might warrant tightening and draw investors back to US assets.
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