Microsoft ((MSFT) – Get a report Thursday, which is interesting considering the 2% rise in the S&P 500.
In fact, technology in general is in trouble, with Apple ((AAPL) – Get a report flat the day, while the alphabet ((GOOGL) – Get a report and Amazon.com ((AMZN) – Get a report were both on the session.
On the one hand, it is somewhat worrying to see a market leader like Microsoft not participating in the rally on Thursday. However, it continues to hold on despite the delay of its Surface Neo product, while interrupting work on Windows 10X.
Is mega-cap technology try to tell us something?
At this point in the game – with the S&P 500 up 28.5% from the March lows – that’s to be guessed. All we can do as traders is move from one level to another, allowing price action to be our guide, do not the news. With this in mind, let’s look at the graphics.
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Trade Microsoft stocks
Let’s start with the good. Microsoft stocks have managed to dip near $ 135, recover several major moving averages and are now digging into the $ 160.
The last weeks of price action are over a lot of good for the bulls. By retrieving as many key levels, retracements and moving averages, it offers investors several layers of support to consider, rather than an almost infinite amount of resistance levels.
As much as I like to see stocks recover, I have to be realistic and take some of that decision with a grain of salt. Does this mean that the rise is made on the market or at Microsoft? No, but the risk / reward becomes less attractive as one goes up without any kind of back-and-fill action.
If Microsoft’s stock continues to rise, the bulls must see it recover and close above the 61.8% retracement near $ 168 and the $ 170 level. The more it involves $ 175 to $ 178, the latter being the 78.6% retracement from the February highs. Beyond that, over $ 180 is up for grabs, which is incredible even due to the price action in recent weeks.
On the downside, the first indicator of prudence would be a close below the 50-day moving average and $ 162.50. If MSFT cannot maintain this mark, it involves less than $ 160. I think at the end of the day, many investors – even the bulls – would like a reasonable withdrawal from Microsoft.
Falling back to the $ 150 level and the 200-day moving average would be one of those withdrawals. Even a drop in previous range resistance to $ 140 would represent a higher low, offering bulls an excellent buying opportunity while maintaining bullish construction.