4 Trade Ideas for Microsoft: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Microsoft, $MSFT, started higher in December and confirmed a reversal when it made a higher high in February. It continued to move higher into April before a pullback. The pullback found support at the end of May and it reversed higher to find a consolidation range at new all-time highs. It held in that range for 5 months before breaking to the upside 2 weeks ago. It consolidated there until pushing higher Friday.

The break of the long consolidation gives a target to 153 and then 155.50. The RSI is strong and rising in the bullish zone with the MACD positive and moving up. The Bollinger Bands® have also turned higher. There is no resistance higher. Support lower comes at 145 and 141.60 then 136.85 and 134.40. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.40% and will begin trading ex-dividend on November 20th. The company is expected to report earnings next of January 28th after the close.

The November options chain expiring this week show large open interest at the 145 strike which could hold the price close. In December open interest is large from 140 to 150, biggest at 150, on the call side, with big slugs at 135 and 125 on the put side. The January chain sees open interest from 110 to 170 with the peak at 140 on the call side. On the put side it is biggest at 100 and drifts lower to 140. the February chain, the first to cover the next earnings report, open for business Monday. March open interest is building from 140 to 155 on the call side and from 120 to 140 on the put side.

Microsoft, Ticker: $MSFT

Trade Idea 1: Buy the stock on move over 146 with a stop at 141.50.

Trade Idea 2: Buy the stock on move over 146 and add a December 145/140 Put Spread ($1.75) while selling the December 150 Call ($1.31).

Trade Idea 3: Buy the December/February 150 Call Calendar (approx. $3.25) and sell the January 135 put ($1.10).

Trade Idea 4: Buy the January 140/150 bullish Risk Reversal (35 cents).

Premium Content

The Best

The Rest Premium

Free Content

The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.   

After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which moving into November options expiration sees the bull market is back on in force, with the small caps on the edge of joining the party.

Elsewhere look for Gold to continue in its short term downtrend while Crude Oil consolidated. The US Dollar Index is drifting to the upside while US Treasuries continue to move lower. The Shanghai Composite looks to continue to hold tight around 3000 while Emerging Markets pause in their uptrend.

Volatility looks to remain very low keeping the bias to upside for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ have broken out and are renewing the bull market while the IWM is on the cusp of a break out that could attract more buyers. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog