Thursday, January 29, 2015

Microsoft Corporation (NASDAQ: MSFT)

Microsoft Corporation develops, licenses, markets, and supports software, services, and devices worldwide. The company’s Devices and Consumer (D&C) Licensing segment licenses Windows operating system and related software; Microsoft Office for consumers; and Windows Phone operating system. Its Computing and Gaming Hardware segment provides Xbox gaming and entertainment consoles and accessories, second-party and third-party video games, and Xbox Live subscriptions; surface devices and accessories; and Microsoft PC accessories. The company’s Phone Hardware segment offers Lumia Smartphones and other non-Lumia phones. Its D&C Other segment provides Windows Store, Xbox Live transactions, and Windows Phone Store; search advertising; display advertising; Office 365 Home and Office 365 Personal; first-party video games; and other consumer products and services, as well as operates retail stores. The company’s Commercial Licensing segments licenses server products, including Windows Server, Microsoft SQL Server, Visual Studio, System Center, and related Client Access Licenses (CALs); Windows Embedded; Windows operating system; Microsoft Office for business, including Office, Exchange, SharePoint, Lync, and related CALs; Microsoft Dynamics business solutions; and Skype. Its Commercial Other segment offers enterprise services, including premier support services and Microsoft consulting services; commercial cloud comprising Office 365 Commercial, other Microsoft Office online offerings, Dynamics CRM Online, and Microsoft Azure; and other commercial products and online services.
Take a look at the 1-year chart of Microsoft (Nasdaq: MSFT) below with my added notations:
1-year chart of Microsoft (Nasdaq: MSFT)
Over the last 2 months, MSFT has been consolidating between a couple of important price levels. First, MSFT has formed a clear support level at $45 (blue), which was also a key resistance last year. In addition, the stock has also been forming a down trending resistance level (red). These two levels combined have MSFT stuck within a common chart pattern known as a descending triangle that will eventually have to break one way or another.

The Tale of the Tape: MSFT is currently trading within a large descending triangle. A long trade could be made on a break above the down trending resistance or a pullback to $45 support. A short trade could be made on MSFT if the stock breaks below the $45 support level.
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