Dear readers, Microsoft had to accept a strong price setback in a generally unstable trading environment in the past few days. In the process, important support levels were also torn. As a result, there is a risk that the stock will slide to its lows for the year. As long as the bears keep the rudder in their hands. The technology giant’s share price repeatedly cut its teeth at the 200-day line at nearly $292 in August and then took a step back. The stock then sank below the 50- and 100-day lines last Friday, sending a sell signal.
If the bears sustainably succeed in surpassing the June high at around $268, then the $260 level would mark a new support line. If this level is also breached, the bulls should face a tough headwind in the area of the 250-dollar mark. Furthermore, the support lines at $245.94 (July low) and $241.53 (June low) have important significance for the bulls. Looking at the upside, the bulls could reach the GD50 at 269.44 dollars and the GD100 at 271.1 dollars again as soon as possible.
What experts say about the Microsoft stock
The experts on Wall Street believe that the bulls will make a swift counterattack and are forecasting an average price of 330.61 dollars for the next twelve months. That is 23 percent above the current value. In total, 55 experts rate the stock as a buy and five analyse it as a hold. There is currently no recommendation to sell.
From a chart perspective, the picture of Microsoft has meanwhile become tighter and there are indications that the bears will once again have the upper hand in the coming days. However, the potential of the Microsoft stock is relatively limited, considering the fundamentals Microsoft has at the moment.
Relative Strength Index
The Relative Strength Index (RSI for short) compares the upward and downward movements of an underlying over time and is therefore a good indicator of overbought or underbought stocks. The RSI of the last 7 days for Microsoft stock has a value of 84.64. On this basis, the stock is thus overbought and receives a “sell” rating from analysts. We now compare the 7-day RSI with the value of the RSI on a 25-day basis (42.85). In contrast to the RSI of the last 7 trading days, Microsoft is neither overbought nor oversold on this basis. The thus deviating rating of the stock for the 25-day RSI is therefore a “hold” rating.
With a dividend of 0.85%, Microsoft can only be rated slightly lower than the “Software” sector average (1.75%) in terms of payout, as the difference is 0.9 percentage points. This currently leads to a “Hold” rating. Overall, investors should keep an eye on the stock and maintain their exposure.