Microsoft Corp. - MSFT - close: 25.54 change: +0.31 stop: 23.25
Why We Like It:
After a painful sell-off in early summer shares of MSFT, one of the biggest technology companies on the planet, have found support. The stock has been consolidating sideways the last few months with a neutral trend of higher lows and lower highs. That has changed recently with MSFT's breakout higher. There is still some resistance near $25.50 but overall it looks like the bottom is in.
Investors have been focused on the tech sector for growth and while MSFT is a very mature company they still offer a lot of potential. I am suggesting new long-term call LEAP positions now. However, depending on your trading abilities, you can fine tune your entry point. If you're nimble enough you could try and buy a dip near the $25.00 or $24.50 levels. Or if you want to see more confirmation of the move higher you could wait for a close over $25.50 or even $26.00.
The $28.00 level could be significant resistance as would the 2010 highs near $31.50. Long-term my upside target is $31.00. FYI: MSFT is due to report earnings on Oct. 28th, after the closing bell. Wall Street expects a profit of 55 cents. Earnings reports can create a lot of volatility and more conservative traders may want to wait until after the report before launching positions. Remember, our time frame is nine to twelve months.
Founded in 1975, Microsoft (Nasdaq â€œMSFTâ€) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential. (source: company press release or website)
Use the 2012 or 2013 January calls (Entry point - now, at current levels)
BUY CALL 2012 Jan $25.00 strike (MSFT1221A25) current ask $3.20
BUY CALL 2013 Jan $30.00 strike (MSFT1319A30) current ask $2.33
Chart of MSFT:
Weekly Chart of MSFT: