Microsoft share price selloff leaves uptrend intact
Microsoft stock has fallen sharply since February, but with the uptrend intact is a big recovery around the corner?
After hitting a year-high of $187 a share in mid-February, Microsoft shares lost 27% of its value, with the company forced to lower its third quarter (Q3) guidance due to the Covid-19 pandemic interrupting supply chains.
‘As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated,’ the company said.
Microsoft had previously forecast for third-quarter sales of $10.75 billion - $11.15 billion in its More Personal Computing segment.
But despite Microsoft shares falling sharply since February, with the uptrend intact is a big recovery around the corner?
Microsoft: technical analysis
Microsoft has long possessed one of those great stock charts that should be framed as an example of a trend. Since late 2011, the price has steadily climbed, creating higher highs and higher lows and surpassing the peaks of 2000 and 2007.
While the stock has lost around 30% since the beginning of February, this has only put a dent in the ongoing uptrend, potentially providing the first real dip for investors since the end of 2018, according to Chris Beauchamp, chief market analyst at IG.
‘Such substantial dips in the stock price have only been seen several times in the past few years and have been followed up by strong returns,’ he said.
‘A fresh bullish crossover in weekly stochastics would provide the confirmation of a higher low, assuming the broader market does not see a much deeper selloff,’ Beauchamp added.
On the hourly chart, rallies were firmly sold throughout March, as was the case on 3, 13 and 20 March. But the price appears to have found a low for the time being, consolidating around $135 and pushing to $155.
For the time being, dips are being bought, as was the case on 26 March, while so far on 30 March the price has also managed to hold its ground around $149. A reversal back below $140 would negate the bullish view, while by contrast further gains above $155 head towards $161 and $175.
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