Microsoft numbers solid, stock nears recent highs
The company behind the most popular desktop operating system in the world has reported its quarterly earnings numbers after the bell on Friday. The company has handily beat analysts estimates on and shed some light on the plans of the company's new CEO Satya Nadella.
The main takeaway from the conference call which was headed by Mr. Nadella was that Microsoft intents to lead an effort of integrating computing devices. Whilst the company excels in software business development, its Windows 8 misstep has cost it a lot. The company is moving ahead to fix its mistake.
Whether or not it will fully succeed remains unknown, however it is very likely that we will see an expanded set of products leveraging existing brands of the company to focus on a more integrated ecosystem. The company's XBOX coming into the home, while Windows operating systems catering to mobile and the desktop.
In the future information technology will be driving everything and Mr. Nadella's vision is that a single environment will be essential to assure that all the different devices that consumers use be properly integrated to work together as one single convenient product.
That said, there is already serious competition in the space and Apple is probably the most advanced of the companies that are leveraging their own solutions in this space. Google and Amazon are not that far behind, despite the latter two being somewhat different as Google's Chrome OS still has a very small market share and Amazon only possessing its Kindle hardware solution which is based on Google's Android.
Looking at the charts a key level to look at is the recent highs at $41.66. If that is broken there will be little to stop the price going even higher. On the other hand we are encountering some decent bids this morning and prices are already sup by more than 3%.
The first opportunity to buy calls emerges if we see prices drop to the previous resistance, turned support line at $40.69. IT should be perfect for buying daily calls, unless we see a break to the downside. For now we see this as a remote possibility at least until the broad market maintains a positive momentum.
The downside will be supported by many levels. First one after our call buying trigger is the area around $39.50 where there was some decent support last week. After that is broken on a sustained hourly basis we would be reversing our bet and buying puts to target a test of the $38.90-39.00 area.