In the lead-up to Microsoft's much-anticipated earnings report for the fourth financial quarter, the tech giant's shares have been witnessing a level of volatility not seen in recent times.

On July 18, Microsoft stock surged in value during the New York trading session, soaring from $344.18 to an impressive $366.37 at FXOpen. This remarkable spike marked the end of a consistent year-long climb in value for the company's shares.

However, the euphoria from this one-year high was short-lived, and Microsoft's stock took an unexpected downturn towards the end of last week.

As of today's market opening, the shares are valued at $344.13, which is substantially lower than the peak they reached last week. The timing of this shift in sentiment is particularly intriguing, occurring just before the company's earnings report for the fourth quarter, which is set to be made public tomorrow afternoon UK time.

What will affect the market going forward?

Investors and analysts are closely watching this volatile situation, eager to gain insights into the factors driving the fluctuations. The long-term prospects for Microsoft's stock remain a subject of much speculation, as the company, traditionally known for its stability, could go either way in the current climate.

A significant development that has impacted investor sentiment is Microsoft's ambitious bid to acquire gaming giant Activision Blizzard. The company achieved a major victory as US authorities, after initial opposition, approved the merger. However, the Competition and Markets Authority in the United Kingdom is yet to give its approval, and it remains steadfast in scrutinising the deal for potential monopolistic implications.

The proposed acquisition comes with a hefty price tag of $68 billion, and failure to secure approval from UK authorities could lead to investor concern about the capital spent pursuing a deal that may not come to fruition.

Long-term view

While all eyes are on tomorrow's earnings report, astute investors are looking ahead and considering the myriad variables that could impact Microsoft's stock performance. The uncertainty surrounding the outcome of the Activision Blizzard acquisition, coupled with the potential consequences of its success or failure, leaves the market in a state of cautious anticipation.

For now, the company's shares hang in the balance, and investors are bracing for the earnings report that could sway the stock in either direction. The release of financial figures will undoubtedly shed light on Microsoft's current performance and future outlook, providing crucial insights into the company's standing in the tech sector.

As Microsoft navigates through these pivotal moments, market participants remain on edge, ready to act on the earnings report's revelations. The usually steady trajectory of Microsoft's shares has encountered turbulence; therefore, it remains an interesting asset to look at.

MSFT Stock Technical Analysis

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