There''s no other way to say it: In a bear market, technology is weakened. Many companies are down 40% to 50% or more.
Don''t forget to go to Microsoft (MSFT) for a Microsoft Corporation report.
The stock is currently 27 percent below its all-time high, which has experienced a peak-to-trough decline of 31%.
On June 21, I found out that Apple (AAPL) - Get Apple Inc. Reportwas the only FAANG stock outperforming Microsoft in these areas. Along with Alphabet (GOOGL) - Get Alphabet Inc. Report, these stocks are forming a nice trio of strength vs. the rest of its tech competitors.
I want to remove even more layers of Microsoft.
Microsoft has the highest profit margins in the group, with 37.6%. Meta (META) - Get Meta Platforms Inc. Report(formerly Facebook) is second at 31.2%. No other component is above 28%.
At first glance, 27 times this year earnings may seem a little higher compared to Apple and Alphabet at 22 times and 20 times earnings.
Microsoft is forecast to generate 18.5% revenue growth this year and 14% growth next year, along with 15% earnings growth in both 2022 and 2023.
Not only are we talking about sector-leading profit margins, a fortress balance sheet, and robust cash flow, but also about solid and more significant dependable top- and bottom-line growth.
Apple is expected to generate single-digit earnings and revenue growth this year and next year, whereas Alphabet has robust revenue-growth (forecasts, 15% in 2022 and 2023, while earnings this year are expected to decrease.
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Trading Microsoft Stock
Microsoft''s stock market is ranked hebdomado.
TrendSpider.com has provided a chart.
Do FAANG-leading profit margins ensure that Microsoft stock is done going down? Of course not! Were we in the throes of a bear market, and there is certainly something to happen in this situation.
The stock might climb 40% from the lows while still not retest the high. It might also drop another 20% and test its 200-week moving average (putting it down 42% from the highs). Do not rule out anything in a bear market.
So far, the correction has been fairly consistent.
Microsoft''s stock retraced half of its losses after a 23% rise to the first-quarter lows, broken the lows and traded down to a 161.8% downside extension nearly to the penny.
As a result of this improvement, support has twice shifted to resistance, between $315 and $270.
The bulls have a tough hill to climb, now that the stock is trying to gain ground.
Microsoft must reclaim $270 and active resistance, both of which comes from the 10-week moving average.
If it can do that, then it may be possible to make a larger profit and, in turn, even have a low to work with.
If Microsoft''s stock isn''t capable of making the same level of progress, the low near $240 remains fragile.
The door opens at an all-time high of $225, followed by a 200-week moving average. These areas, for the long term investor, appear to be buying opportunities.