What's Next For Microsoft Stock After Earnings Breakout?

Microsoft Corp. MSFT shares are trading higher Wednesday in the wake of the tech giant's first-quarter results.  

Total company revenue rose almost 22% year-over-year and amounted to $45.32 billion.

Microsoft was up 4.04% at $322.62 at last check.

Microsoft Daily Chart Analysis

• The stock broke out of what technical traders call an ascending triangle pattern, retested resistance as support and began pushing higher. 
• The $305 price level held as resistance in the past, but as the stock crossed above this area, it may now hold as a place of support on the chart. If it is unable to hold as support, the stock may find support near the higher low trendline.
• The stock trades above both the 50-day moving average (green), and the 200-day moving average (blue), indicating the stock is likely facing a period of bullish sentiment.
• Each of these moving averages may hold as a potential area of support in the future.
• The Relative Strength Index (RSI) has been flying higher the past few weeks and now sits at 75. The RSI is now in the overbought range and seeing much more buying pressure than selling pressure.

See Also: Productibity Is Paying Off For Microsoft

What’s Next For Microsoft?

Bullish traders would like to see the stock continue to break out past the pattern. Eventually the stock will cool off, and then bulls are looking for it to have a period of consolidation. If the stock can hold some gains while consolidating, it may be ready to push higher in the future once again.

Bearish traders are looking to see the stock fall back below the $305 level and hold it as resistance. Bears are then looking to see the stock fall below the higher low trendline. If the price cannot get back above these levels after falling below them, the stock may be ready for a strong bearish move.