4 Trade Ideas for Microsoft: Bonus Idea

Microsoft, $MSFTWealth Strength IndexAAPL is Extremely Up and trending Up, started higher in December and confirmed a reversal when it made a higher high in February. It continued to move higher into April before a pullback. The pullback found support at the end of May and it reversed higher to find a consolidation range at new all-time highs. It held in that range for 5 months before breaking to the upside 2 weeks ago. It consolidated there until pushing higher Friday.

The break of the long consolidation gives a target to 153 and then 155.50. The RSI is strong and rising in the bullish zone with the MACD positive and moving up. The Bollinger Bands® have also turned higher. There is no resistance higher. Support lower comes at 145 and 141.60 then 136.85 and 134.40. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.40% and will begin trading ex-dividend on November 20th. The company is expected to report earnings next of January 28th after the close.

The November options chain expiring this week show large open interest at the 145 strike which could hold the price close. In December open interest is large from 140 to 150, biggest at 150, on the call side, with big slugs at 135 and 125 on the put side. The January chain sees open interest from 110 to 170 with the peak at 140 on the call side. On the put side it is biggest at 100 and drifts lower to 140. the February chain, the first to cover the next earnings report, open for business Monday. March open interest is building from 140 to 155 on the call side and from 120 to 140 on the put side.

Microsoft, Ticker: $MSFTWealth Strength IndexAAPL is Extremely Up and trending Up

Trade Idea 1: Buy the stock on move over 146 with a stop at 141.50.

Trade Idea 2: Buy the stock on move over 146 and add a December 145/140 Put Spread ($1.75) while selling the December 150 Call ($1.31).

Trade Idea 3: Buy the December/February 150 Call Calendar (approx. $3.25) and sell the January 135 put ($1.10).

Trade Idea 4: Buy the January 140/150 bullish Risk Reversal (35 cents).

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.