Technical Analysis: Microsoft Earnings On Tap

Microsoft (MSFT) is set to report earnings on Wednesday, October 30th, after the stock market closes. Earnings are expected to be $3.10 per share on revenue of $64.43 billion.

When looking at the chart, there are issues that show up. There is a bigger head and shoulder pattern forming over the last year. Head and shoulder patterns are bearish. In addition, there are multiple parallel channels that appear to show Microsoft breaking down below one, and nearing another breakdown below the next.

Overall, earnings can be a wild card in terms of short-term movement. While the long-term chart is extremely bearish, the short-term chart could swing as high as $442 as first resistance, then $460 as second resistance.

Should Microsoft fall on earnings, first support as at $419 with second support at $395.

Overall, the probabilty for the next 6-12 months remains very bearish, but earnings could whip the stock in either direction. The chart above shows the levels where investors should expect support and resistance.