Microsoft Corporation (NASDAQ:MSFT) closed at $299.50 in the last trading session. The valuation is 3.21% lower than the previous close. The price signals a consolidation phase, and investors should take advantage of the opportunity.
Microsoft is trading at a PEG ratio of 2.68. It shows that the stock could probably be overvalued. However, it is not unusual for technology stocks to trade at such valuations. The stock shows a forward PE of 33.39 and an expected EPS growth of 12.48%.
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At a price of $299.50, the stock is at a key swing level. For the emotional investor, breaching below $300 could signal that bears are in control. For the rational investor, however, it is critical to read not just the price but the overall state of the market momentum.
Microsoft’s price consolidation between $280 and $315
Demand and supply levels signal that MSFT price ranges between $280 and $335. A closer analysis of pricing data over the last few weeks indicates that stock at prices stabilized between $280 and $315. The narrower deviation indicates reducing volatility consistent with the consolidation phase.
Reading the linear channel and the MACD shows that investors need to start looking at the stock more favorably. At a $299.50 valuation, MSFT is at the 50-day moving average. It is also at the lower bound of the bullish regression channel.
Looking at the short timeframe moving averages, the 10-day MA at $301 is just below the 20-day MA at $309. This signals a short-term decline in the longer-term gaining period. We, therefore, think that the stock is at a good buying point.
Summary
Microsoft’s share price is in a consolidation phase. Prices can be expected to stabilize between $280 and $315 in the short term. Investors should take advantage of this phase and wait for the bulls.
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