Microsoft Corporation (NASDAQ:MSFT) Expecting Another Profitable Quarter
We’re expecting another blowout quarter from Microsoft (NASDAQ:MSFT) when it reports its fiscal year 2018, first-quarter earnings after the market closes on Wednesday October 24.
It’s difficult to put together a bearish call on Microsoft, no matter how hard its stock has been hammered during this correction. Shares closed at just under $109 on Friday, down from almost $116 earlier in October, off 6% in just a few weeks.
Nevertheless, the company is firing on all cylinders following the successful execution of its turnaround strategy which focused on cloud computing and solidified the tech giant’s legacy businesses. Microsoft remains the leader in the desktop and laptop operating system market, with a commanding 88% market share.
It’s Office, which has been transformed into a subscription service for companies, continues to be a powerful driver of earnings. In the fourth quarter, revenue from cloud-computing platform Azure rose 89%, while sales of web-based Office 365 software to businesses climbed 38%.
For Q1, Microsoft is forecasting revenue of between $27.35-$28.05 billion, which would represent year-over-year growth of 12.9% at the midpoint of guidance. The company is anticipating cost of goods of about $9.6 billion and operating costs of $9.25 billion. As per analysts consensus estimate, Microsoft will post $0.96 per share profit on revenue of $27.9 billion.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 113.38.
The projected lower bound is: 103.90.
The projected closing price is: 108.64.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 56.3924. This is not an overbought or oversold reading. The last signal was a sell 17 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.51. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 60 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -46. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 11 period(s) ago.
Rex Takasugi – TD Profile
MICROSOFT CP closed up 0.160 at 108.660. Volume was 23% above average (neutral) and Bollinger Bands were 57% wider than normal.
Open High Low Close Volume___
108.930 110.860 108.210 108.660 32,785,476
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 109.12 110.73 100.07
Volatility: 48 28 30
Volume: 38,438,004 26,151,438 28,857,292
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
MICROSOFT CP is currently 8.6% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of MSFT.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on MSFT.O and have had this outlook for the last 7 periods.