MSFT Earnings Preview: Key Stock Levels & Options Activity

Core Viewpoint - Microsoft shares are experiencing an increase ahead of the upcoming earnings report, with expectations for adjusted EPS of $3.88 and revenue of $80.23 billion [1] Group 1: Market Performance - Microsoft shares are up approximately 4% as the week concludes, although they are underperforming compared to the S&P 500 [2] - The tech sector is outperforming with a growth of 19.8%, while the S&P 500 has seen a rise of around 13% [3] - Microsoft ranks fifth among the "Mag 7" tech companies, only outperforming Meta and Amazon [4] Group 2: Analyst Ratings and Price Targets - UBS has reduced its price target for Microsoft shares from $650 to $600 but maintains a buy rating [1] - Canaccord Genuity also lowered its price target from $639 to $590 while keeping a buy rating [5] Group 3: Technical Analysis - Microsoft has faced a challenging quarter, with a notable decline after reaching highs near $555 [6] - Current support levels are identified between 448 and 455, with a potential bullish outlook indicated by a falling wedge pattern [7][8] - The RSI is nearing a point that could invalidate a downward trend, suggesting a more bullish sentiment if it crosses above the 50 midline [9] Group 4: Options Activity - There is significant options trading activity, with about 921,000 options traded on the day, indicating high interest [11] - Notable trades include the sale of 8,000 February 6th 480 strike calls for approximately $6.8 million and 2,350 February 13th 490 puts for about $7.4 million [12]