MSFT Stocks: Fundamental vs. Technical Analysis

FXOpen -

This week 166 companies that make up 33% of the S&P 500 index will publish their reports for the second quarter. Among them, the second largest company in the index, Microsoft. And here, an interesting situation develops: the fundamental background is quite strong, and technical analysis shows signs of weakness. Judge for yourself.

Fundamental analysis:

  • the Android version of the sensational ChatGPT will be released this week;
  • Fundstrat analysts see a target price for MSFT shares of around USD 380 in the short term and USD 426 in the long term;
  • Barclays analysts have rated MSFT stock as a Buy with a target of USD 425 (previous MSFT share price target of USD 425) amid Microsoft 365 AI rollout.

However, let's evaluate the MSFT stock chart from the point of view of technical analysis. Note that after a sharp breakdown of the psychological level of USD 350 on July 18, 3 days of rollback followed, which completely leveled the progress of the bulls and lowered the stock price back below USD 350; Friday's low is below the low of July 18, which can be interpreted as a shortage of buyers after a bullish breakdown. The attack of the bulls did not attract followers. Thus, the market, by its behavior, casts doubt on the scenario of further growth, which can be imagined on the basis of a strong fundamental.

Fundamental or technical analysis? We will find out on Tuesday after the close of the main session, when the Microsoft report is released.