How To Trade Microsoft Stock Before And After Q1 Earnings – Microsoft (NASDAQ:MSFT)

Microsoft Corporation MSFT will release its financial results for the first quarter of 2023 after the market close on Tuesday. The stock was trading over 1% higher at the start of the event.

When the tech giant released its fourth-quarter financial results on July 26, the stock fell in after-hours trading but gapped by the start of the following trading day, rising 6.69%.

For the quarter, Microsoft reported earnings per share of $2.23 on revenue of $51.9 billion. Both numbers missed analyst consensus estimates of $2.30 and $52.47 billion, respectively.

For the first quarter, analysts estimate Microsoft will post earnings per share of $2.32 on sales of $49.84 billion.

At press time, Wedbush analyst Daniel Ives maintained an Outperform rating and a $320 price target on Microsoft shares… Continue reading

From a technical analysis perspective, Microsoft stock is likely to rise in the coming days but is facing a slight pullback. It should be noted that holding stocks or options over a profit squeeze is akin to gambling, as stocks can be bullish on a profit miss and bearish on a profit decline.

Options traders, particularly those who hold short-term calls or puts, take on additional risk as the intuitions writing the options increase premiums to account for implied volatility.

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The Microsoft chart: Microsoft reversed course into an uptrend on October 14 after printing a fresh 52-week low at $219.13. The stock’s most recent higher low was formed at $234.29 on Oct 19 and the most recent confirmed higher high was printed at $243.93 the previous day.

  • Microsoft opened with an inside bar on Tuesday, but later broke away from the mother bar on Monday. The stock is heading towards the 50-day simple moving average (SMA) and if Microsoft can revisit the level as support, it will indicate that longer-term sentiment has turned bullish.
  • The surge took place on below-average volume, which may worry some bullish traders. Bulls want stocks to move higher on above-average volume to indicate a high level of interest in the stock.
  • If Microsoft regains the 50-day SMA as support on a positive reaction to its earnings pressure, it is likely to close a gap above it that exists between $260.40 and $265.16. In this case, Microsoft may find resistance at the top of the gap and pull back down to print a higher low.
  • Bearish traders want to see Microsoft suffer a bearish reaction to its earnings push and break below $234, which would nullify the downtrend.
  • Microsoft has resistance above $256.84 and $263.19 and support below $249 and $243.

Also Read: Drip, Drip, Drip: It’s a Waiting Game As Investors Watch for Post-Closing Direction from Microsoft and Alphabet

Photo via Shutterstock.

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