Key MSFT levels to watch as Microsoft prepares to post Q2 earnings

Despite Microsoft (NASDAQ: MSFT) being a household name in the computer field, it still pulled back over 27% year-to-date (YTD). The company managed to transition from traditional desktop computers into cloud computing, gaming, and productivity software. 

In essence, the transition to cloud computing brought on a lot of big competitors like Amazon’s (NASDAQ: AMZN) AWS and Alphabet’s (NASDAQ: GOOGL) Google Cloud; yet, MSFT managed to hold its own, now occupying second place in cloud services, right behind AMZN and its AWS. 

Meanwhile, Microsoft is also entering the metaverse actively by promoting the immersive next-generation internet through HoloLens, a mixed-reality headset for remote collaboration. This should take place through, among other things, in the corporate metaverse utilizing Dynamics 365 Connected Spaces and Mesh for Microsoft Teams. 

MSFT chart and analysis

Just over the last month, the shares are down over 7%, reaching the oversold territory. Currently, the shares are trading below all daily Simple Moving Averages (SMAs). These levels could be tracked by traders looking to profit from the possible moves up or down of the stock. 

From the current trading price, if investors wanted to go long the stock, the first key pivot point for resistance could be at $247.01, with the second one set around $251.77 if the goal is netting a profit of 8.8%, aiming for the shares to reach $263.63. This move would represent a 14-day retraction of the sell-off. 

On the other hand, if traders wanted to sell short the shares, the key support pivot point would be at $239.52, and the second at $236.78, if a trader was aiming for an 8.8% profit and the shares to reach $222.

Presently, analysts rate the shares as a strong buy, predicting that in the next 12 months, the average price could reach $354.92, which is 46.50% higher than the current trading price of $242.26.

Investors looking to enter the stock should keep an eye on the broader market before investing in MSFT. It seems as if there could be more pain across all market segments with raging inflation and the potential for more rate hikes from the Federal Reserve. 

In the meantime, traders could watch for technical signals the charts are showing to trade the moves the stock could be making in the next few days as Microsoft winds down the June quarter and prepares to post its earnings in July. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.