Dow component Microsoft Corporation (MSFT) is trading within a few points of February’s all-time high at $190.70 and could break out in coming weeks, entering a sustained trend advance with a measured move target above $240. It has already lifted into the second slot in Dow relative strength, just behind Apple Inc. (AAPL), highlighting continued buying interest despite the pandemic and weakening sentiment triggered by recent protests and looting.
The company benefited from a huge surge in cloud-based metrics in the first quarter as a result of mandatory stay-at-home orders, with impressive gains reported in video conferencing, gaming, and other popular applications. Heavy usage has continued in the second quarter, boding well for Microsoft’s next generation of mainstream software products, including Microsoft 360 and the Windows Core operating system.
The stock held a four-year trendline during the first quarter swoon, maintaining its long-term bullish outlook despite technical damage all across the market universe. Monthly relative strength readings have now turned higher, indicating that bulls have taken control of long-term price action. However, the upside may need a bullish catalyst or improvement in broad sentiment to get investors off the sidelines and into new positions.
Despite the recovery, Microsoft could struggle with commercial