Dr. Stoxx
Stock Trader & Author, Oxford DPhil, Trading Education
An unusually large spike in call flow supports Microsoft's bullish $555 target. The 11:00-11:15 ET bucket showed $3.4 million in net calls, almost entirely in September 2027 $600 contracts; the chart projects a rise to $555 before a pullback. x.comÂ
Microsoft at $382 is a great deal to tuck away for 10+ years, even if it is not the low. Stocks popular on X and heavily held by retail would be oversold even more in a 2022-style selloff, so Microsoft can also serve as a source of funds to buy them then. x.com x.comÂ
Microsoft looks due for a pullback after rallying from 390 to 491 in about two weeks, as capital rotates out of software into semiconductors. Heavy trimming makes sense here; dealers appear positioned for a mini pullback while semiconductor, AI and photonics stocks such as Nvidia, AMD and Intel bounce. x.com x.comÂ
Anthropic's S-1 and @UncleAlpha007's claim that Microsoft is growing despite a 27% headcount cut have turned the near-term tech-equity view bullish. At least a tradable rally is expected; further upside depends on Iran developments and PCE. Stay nimble. x.com x.comÂ
Microsoft remains in an uptrend, so a pullback from its $490-510 resistance zone near all-time highs would be a normal correction, not a reversal. Near-month calls are seeing heavy buying with volume above open interest, showing institutions are still bullish. Near term, volume is shrinking and hourly and four-hour RSI show bearish divergence, so chasing is not advised; holding the four-hour 21 EMA would mark a dip worth buying, while a break with weakening options flow would be a warning. x.comÂ
Microsoft is expensive on cash flow even though its 19-22x forward P/E looks like a 40% discount to its 10-year average. Its 2.0% forward free-cash-flow yield sits below the 3.3% 10-year median, and at this point in the cycle earnings multiples mislead while free cash flow is what the market actually prices. x.comÂ
Microsoft is one of the most disrespected stocks in the market and a clear, easy buy after falling more than 18% this year. Per VJN Capital, it trades at its lowest forward P/E in seven years. x.com x.comÂ
Microsoft is the cheapest of the Magnificent 7 and has moved back above its 100-day moving average. OpenAI's IPO this week should also help Microsoft. x.comÂ
Microsoft is cheap but not a long-term holding, because it is not growing fast enough while Nvidia is cheaper, growing much faster and better positioned. Microsoft may be re-rating, but the backdrop could also push it to a 15x P/E, so for now it is only a tradable situation. x.comÂ
Microsoft's record long-term institutional accumulation was the real signal: the largest monthly, weekly and daily volumes ever built up right at the bottom, and the expected short-term flush never came, not even a 10% decline. Short-term bearish speculation was a waste of time. x.com x.comÂ