The Microsoft Company (MSFT), which has beaten the earnings per share (EPS) estimates when it reported results after the close on April 29. The shares have rebounded and moved above its monthly pivot for the month of May at $182.11, but he stayed shy of its intraday high of $190.70 game Feb. 11.
Microsoft stock closed on Tuesday, May 12, to $182.51, up 15.7% year to date, and in the bull market territory to 37.7% above its March 23rd low of $132.52. Also, it is 4.3% below its record high of $190.70.
Shares of Microsoft were above a cross of gold, since March 15, 2019. Its weekly chart has been positive since the week of April 10. Basically, Microsoft is overvalued by a rise in the P/E ratio of 32.99 with a dividend yield of 1.09%, according to the trends.
This tech giant offers a wide range of products and services: operating systems for Pcs, servers, phones, software in the cloud, video games, and online advertising. Microsoft is also the owner of the social media platform LinkedIn. It is a big deal, as the purchase has started on a per-share profit streak of 16 consecutive quarters.
The daily chart for Microsoft
Microsoft has been at the top of a cross of gold, since March 15, 2019, when the 50-day simple moving average rose above the 200-day simple moving average, indicating that the increase in prices to come. This follow-up of the stock to its intraday high of $190.70 game Feb. 11. The stock began its decline with a price gap down on Feb. 24.
The stock has broken below its semi-annual value level at $148.17 and its 200-day simple moving average at $147.48 March 12. The annual value of the level of $136.42 an important buying opportunity on March 16 And March 23.
On the rebound, Microsoft has crossed above its semi-pivot at $148.17 on 26 March. At this time, the stock was back above its 200-day simple moving average. Its quarterly pivot at $170.64 has been crossed to the upside on the 14th of April. Its monthly pivot at $182.11 has been a magnet since 5 May.
The weekly chart for Microsoft
The weekly chart for Microsoft is positive, with above its five-week modified moving average of $172.98. The stock is well above its 200-week simple moving average, or “mean reversion”, to $102.85.
The 12 x 3 x 3 weekly slow stochastic reading is expected at the end of the week up to 72.52, of 65.97 on 8 May. Back in February, of top, this reading has been above 90.00, put the broth in a tire parabolic bubble formation. It was followed by a bear market decline of 30%.
Trading strategy: Buy Microsoft stock on the weakness of the quarterly value level is $170.64. Reduce the holdings on the strength of the all-time high at $190.70.
How to use my value levels and risky levels: The closing price on Dec. 31, 2019, were inputs to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, and new quarterly levels occur at the end of each quarter. Half-yearly levels are updated in the middle of the year, while the levels remain in play throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
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Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.