Not a Top, AI Immergence, Microsoft Run to $121 this Summer. . .I wouldn't believe it myself if I wasn't writing about it, but MSFT still has some room to run.
Microsoft's story and technicals favor upward movement these next few months.
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MSFT is printing an ascending triangle with previous highs in the upper USD $97's, but when price breaks up those levels won't provide much resistance - more on that later.
For now, let's talk about Microsoft's direction as a company. CEO Satya Nadella understands the importance of Web 3.0 and 4.0 and sees the immediate future of computing lies in cloud services, Infrastructure as a Service (I.a.a.S) systems, and Internet of Things (I.o.T) technology and connectivity.
In Q4 2017, Microsoft was already taking market share from the undisputed giant in the space - Amazon Web Services (A.W.S) - with their initiative to expand and improve their Azure cloud platform. Microsoft is pushing efforts to recruit development talent to Azure and onboard more users with improvements and expansions of the platform.
Nadella and Microsoft also understand the revolutionary implications of Web 4.0 and what role AI will play in a "smart Internet". Data and connectivity will be king as AI systems facilitate the wholesale immergence of automation into the human experience, and Microsoft's decision to steer initiative away from products like Windows and into projects like AI development will pay off as automation and I.o.T become a part of everyday life just as Microsoft's operating systems became a part of everyday life back in the 90's.
Shifting focus to the technicals, MSFT is tracing an ascending triangle that is approaching an apex. Price moves follow compressing ranges, and the direction is looking up. The chart shows high volume on the dips in the triangle, indicating buyers are scooping up what they perceive as cheap shares.
Looking way back on a monthly chart, we can see similar price action in 1999 to what we see so far in 2018 - and that means we may not be at a top just yet.
Mimicking 1999's chart would mean bad times long-term, but in the short-term would mean a run in price over the summer and possibly through the end of the year with prices putting in a top sometime in the next few months. I believe this price action meshes well with MSFT's endeavors - shifting focus away from Windows and into I.a.a.S and Azure as well as AI, automation, and I.o.T technology. This shift may put pressure on stock price in the next couple years, but in the short-term, Microsoft might have a relative top ultimately 25%-30% higher than today's prices.
Microsoft could be cheap right now given historical price action, current technicals, and the overall story of the company. I believe Microsoft hasn't put in its highs of the year just yet; the summer and fall could see MSFT in the USD $120's.
I'm still bullish on certain sectors and certain stocks, but in the world's precarious geopolitical and financial environment, I keep some puts on the market and recommend traders and investors alike be prepared for a transition into a bearish paradigm. Be ready for sudden drops in the market. Let profits run, look for good stories and charts, but don't be afraid to take some off the table if you've got good numbers on paper.
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See it on the site: holsturr.com/category/markets/charts/
** For speculative and research purposes only - good luck! **
