Microsoft Corporation (NASDAQ:MSFT) ended the last trading session on Friday with a gain of 10.45% after reporting the last quarterly result that beat the street expectations. The volume surged too with the price to reach 131 million against the daily average of 37 million only.
The revenue of Microsoft Corporation (NASDAQ:MSFT) came at $21.73 billion, increasing by 6.5% on a y-o-y basis and beating the expectations of the analysts by $670 million. A sequential growth of 35% in the number of Office 365 consumer subscribers and a sharp rise in the sales of Surface tablets spurred a 8% increase in the Devices and Consumer segment. The sales from the phone hardware business and growth in other areas more than offset the weaker consumer Windows licensing business. The earnings per share came at $0.61 for the quarter, beating the consensus by about 10 cents but the 10% decline on a y-o-y basis was noted too.
In spite of the consumer Windows and Office business seeing a severe decline, the results actually surprised the market pleasantly and inspired buyers to open the stock with a gap with their demand and close it near the day high.
Technically, this gap up open must be taken together with the gap down seen in the last week of January. These two gaps have created a sideways phase in the band of $40-$44, which remains unconnected to the rest of the price chart. If the Friday gap remains unfilled or the stock doesn’t trade lower than $44, then it will keep this bullish Island Reversal pattern intact and push the price to a new 52-week high.
The long term chart shows a perfect upward channel containing the entire rally from the 2013 bottom. If the upper boundary of this channel turns out to be the target now, then a rally to $52-$53 can be expected in the coming weeks.
