Question
Microsoft(MSFT) is one of my favorite companies to invest in. Since this is one of the largest companies in terms of capitalization with Apple. In
Microsoft(MSFT) is one of my favorite companies to invest in. Since this is one of the largest companies in terms of capitalization with Apple. In my opinion, in the current state of the market, it is worth considering technical analysis, but fundamental news due to inflation will be decisive in the vector of market movement. If I start with technical analysis, I can see that Microsoft, like most of the technical sector, had a bad year in 2022, the stock fell by almost 40% from all-time highs(348$), although this is due to fundamental news (inflation), it is interesting to look at technical analysis. RSI on the weekly chart in January 2022 was above 75, which in itself may mean a correction sooner or later. Further, after January, news began to come in about raising rates due to record inflation in the United States and all stocks, not only the technical sector, began to fall. The stock passed the 50 EMA and went to the 200 EMA during 2022. Since 2023, as the inflation outlook began to improve and the Fed began to signal a halt to the rapid rate hike, Microsoft and other tech stocks have begun to recover, and recently even beat the All Time High a bit. RSI is currently within 53 on the weekly chart after a recent pullback. As well as the price is above the 50 ema. Although Microsoft may soon pull back a little for a short period of time to the 50 ema, I still look very positively at this stock based on the fundamental analysis of the company's finances, as well as the general situation in the market due to the pause of Fed rate hikes, improving inflation indicators such as CPI, PPI, PCE as well as the forecast that there will be no recession in the United States, I have a positive view on Microsoft(MSFT) stock and tech sector in general. Also considering that Microsoft regularly buybacks its shares from the free cash they have, positively influencing the EPS(2.69, 20% Y/Y increase), as well as regular dividend increases, it shows that the company really cares about its investors. Based on this, I would consider a long position in Microsoft stock.
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