When you think of hot technology companies whose stock might be poised for a near term upside move, one of the last names that comes to mind is Microsoft. I am not going to make a case for the fundamentals of the company, that isn’t my area of expertise or interest. My interest in the stock market is in making money!
As I often say “Only Price Pays” and the price action over the last several months suggests that buyers may be gaining control of the stock.
The chart below reveals four different timeframes.
1-Monthly price data since 1995– the stock attempted a breakout in 2007 but its failure lead to a quick move to decade plus lows.
2-Weekly price data since 2008–After finding resistance near 28.50 for close to two years, that level acted as support since mid-summer.
3-Daily price data since October 2011–Resistance just above 31.00 has been tested numerous times “the more times resistance is tested, the more likely that level is to be broken.” With more frequent tests of resistance and higher lows over the last several weeks, the buyers appear to be gaining the upper hand.
4- 30-minute price data since the beginning of August 2012– A move above 31.00 would create a higher high which should lead to continued momentum buying.
Purchasing the stock above 31.00 would make sense for patient traders or investors who would be looking for a move up towards 34-35. If the momentum failed to take hold a protective stop should be placed just under the most recent “higher low” near 30.40