It is with great reluctance that I recommend a long position this weekend. I have a chart list with about 800 of the most tradable stocks in the market. Only 42 posted a gain on Friday, which is not a big surprise. However, only about 20 of the 800 stocks had charts that I would even remotely consider buying. There are two things you can look at after a big market drop. The first is, "which stocks did not drop" and the second is "which declines are worthwhile to buy." Sometimes a big decline is just a prelude to a bigger decline. Buying a one day dip will make you feel like a hero if the market reverses like it did on Thursday. Buying a dip that keeps falling will make you kick yourself for not waiting for a rebound.
I did not want to recommend anything but I chose Microsoft because the trend is strong and the dip gave us a buying opportunity. Options are cheap so the risk is minimal.
New positions are only added on Wednesday and Saturday except in special circumstances.
NEW DIRECTIONAL CALL PLAYS
MSFT - Microsoft - Company Profile
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its company's Productivity and Business Processes segment offers Office 365 commercial products and services, such as Office, Exchange, SharePoint, Skype for Business, Microsoft Teams, and related Client Access Licenses (CALs); Office 365 consumer services, including Skype, Outlook.com, and OneDrive; LinkedIn online professional network; and Dynamics business solutions comprising financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of enterprises. The company's Intelligent Cloud segment licenses server products and cloud services, such as SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure, a cloud platform; and enterprise services, including premier support and Microsoft consulting services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions, as well as provides training and certification to developers and IT professionals. Its More Personal Computing segment offers Windows OEM, volume, and other non-volume licensing of the Windows operating system; patent licensing, Windows Internet of Things, and MSN display advertising; devices comprising Surface, PC accessories, and other intelligent devices; Xbox hardware and software and services; and Bing and Bing Ads search advertising. The company markets its products through original equipment manufacturers, distributors, and resellers; and online and Microsoft retail stores. Microsoft Corporation has collaboration with E.ON; strategic alliance with Nielsen Holdings plc and PAREXEL International Corp.; collaboration with NIIT Technologies Ltd.; and a strategic collaboration with Mastercard Incorporated. The company was founded in 1975 and is headquartered in Redmond, Washington. Company description from FinViz.com.
Microsoft is closing in on one billion Windows 10 installations. This is a money printing machine. Their server software, Office 365, SQL Server, Azure cloud service, are all money printers. They are very close to killing the video game market and putting Gamestop out of business by releasing a download only video game console. They are going to put the Xbox in the cloud. This is called Project XCloud. The idea is to be able to play any game on any device at any time without a controller or software CD. This took some of the excitement out of the Google Stadia announcement.
This is a simple recommendation. Shares closed at a new high on Thursday and pulled back to short-term support on Friday. "IF" the market recovers, Microsoft should make new highs again.
Earnings May 1st.
Buy May $120 call, currently $2.95, stop loss $112.85.
NEW DIRECTIONAL PUT PLAYS
No New Bearish Plays