Mr. Softy (MSFT) has put in a tremendous performance in 2014. This is one of the best years since the dot.com days, the stock up nearly 35% YTD. That’s a stunning amount for a mega cap company, but, more so, the stock has been on a buy signal nearly all year long. Every dip has been minor and a buy point, and only once did it challenge the 100-day moving average (just recently), but it passed the test and move sharply higher.
The impressive note on this stock is the relative strength. As the markets swoon, Microsoft goes down, but not nearly as much as the rest of the market. That demonstrates it has strong institutional interest.
The sharp 20% rally off the mid October lows was on strong turnover, and now we see a nice handle forming in a cup/handle formation. Looking at the chart above, it appears MSFT is ready to move up toward the recent highs near 50. The uptrend line is still intact and reaches up toward 50+.
We added some Microsoft Jan 48 call on Tuesday, looking for that move over 50 just after 2015 begins.
