4 Trade Ideas for Microsoft: Bonus Idea

• Posted by Greg Harmon
• on December 29th, 2025

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

Microsoft, $MSFT, comes into the week in consolidation at the 38.2% retracement of the 2025 move higher, and the 200 day SMA. This comes after a double top. The RSI is rising back to the midline with the MACD moving up but negative. There is resistance at 494 and 502 then 510 and 515 before 523 and 532. Support lower is at 484 and 475 then 471. Short interest is low under 1%. The stock pays a dividend with an annual yield of 0.75% and will trade ex-dividend on February 19th.

The company is expected to report earnings next on January 27th. The January options chain shows biggest open interest at the 470 and 480 strikes on the put side. On the call side it is biggest at 520 then 500. In the February chain open interest is biggest at the 480 put. On the call side it is biggest at 460 below then 510. Finally, in the March chain, open interest is smoothly spread from 490 to below 440 on the put side. On the call side it is biggest at 530 then 500.

Microsoft, Ticker: $MSFT

Trade Idea 1: Buy the stock on a move over 495 with a stop at 475.

Trade Idea 2: Buy the stock on a move over 495 and add a February 485/465 Put Spread ($7.45) while selling the February 525 Call ($6.80).

Trade Idea 3: Buy the January/February 500 Call Calendar ($11.10) while selling the January 480 Put ($4.95).

Trade Idea 4: Buy the March 475/490/535 Call Spread Risk Reversal (40 cents).

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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 with the shortened Christmas week in the books and just 3 trading days left in the year, saw equity markets show mixed strength with the SPY and QQQ rising while the IWM drifted lower.

Elsewhere, look for Gold to continue the uptrend at new all-time highs while Crude Oil holds at the bottom of consolidation on the verge of shifting to a downtrend. The US Dollar Index continues the short term drift to the downside in consolidation while US Treasuries continue in consolidation and looking better lower. The Shanghai Composite looks to continue the sideways motion in the uptrend while Emerging Markets march in place in their uptrend as well.

The Volatility Index looks to continue to hold low in the normal range making it easier for equities to move higher. The charts of the SPY, the IWM and the QQQ look strong on the longer timeframe, with a shift to the large cap SPY leading now. On the shorter timeframe the SPY, the QQQ and the IWM look to have weathered the pullback and are ready to move higher again with the SPY heading the charge. Use this information as you prepare for the coming week and trad’em well.

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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.

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