MICROSOFT CORP. - Microsoft at a crossroads ahead of earnings - 01/25/2023 (GMT)

Shares in Microsoft Corp (symbol ‘MSFT’) have moved up over the last week in line with many other blue chips. American inflation went down as expected in December and the consensus for a single hike by the Fed early next month remains strong. The main event for this share in the near future is its earnings report for the fourth quarter of 2022 on Tuesday 24 January after hours.

The consensus earnings per share is $2.29. The 16 estimates are in a narrow range between $2.25 and $2.33 with only one having been revised up in the last four weeks.
‘Microsoft is one of the better placed tech companies to withstand the likely upcoming economic downturn around the world,’ said Michael Stark, an analyst at Exness. ‘That’s due to its generally strong cashflow as well as its sheer size. A big plus in the current environment of “cash is king” is that MSFT as an asset pays a dividend, and the latest ratio of price to earnings of about 26 makes it around fair value compared to the Nasdaq as a whole by this measure.’
The situation on the chart is quite ambiguous, with the price having moved up consistently since 6 January but now reaching the 50 SMA and just below the 100 SMA. Although there’s no sign of overbought yet, it would usually be difficult for a share to break through a significant dynamic resistance in the runup to earnings. A clear breakout above the value area between those two moving averages would probably require a very strong earnings report or a significant improvement in general sentiment, possibly both.