PreMarket Prep Stock Of The Day: Microsoft

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Several large-cap technology stocks are in the red in Wednesday’s volatile session. However, Microsoft Corporation MSFT is in the green after its earnings report and is the PreMarket Prep Stock Of The Day.

Pre-Earnings Rally: As so common with stocks in long-term uptrends, they will rally ahead of an earnings announcement. With respect to Microsoft, it rallied from its Jan. 15 closing price ($212.85) to a new all-time high ($234.18) and an all-time closing high ($232.32) on Tuesday.

Buyers Not Disappointed: After Tuesday's close, the company reported quarterly earnings of $2.03 per share, which beat the analyst consensus estimate of $1.64. The company reported quarterly sales of $43.10 billion, which beat the analyst consensus estimate of $40.18 billion.

PreMarket And After-Hours Price: Off the print, the issue caught a relentless bid that wasn't satisfied until it peaked at $247.70 in the after-hours session and reversed course. It retreated to end the after-hours session at $240.92. During Wednesday’s premarket session, it had a large trading range from $234.90 to $240.90.

Price Action During The Regular Session: After a much higher open ($238), investors had the opportunity to purchase the issue within a dollar of Tuesday’s low ($230.08), when it bottomed at $230.74 around 10 a.m. ET. The rebound off that low found resistance just ahead of the premarket high ($240.90) at $240.44 and has fallen back into the upper $230 handle as of 12:30 p.m.

Moving Forward: Microsoft is poised to post a new all-time closing high if it can end the session above $232.22. Focusing on Wednesday’s closing price, along with the pair of lows from Tuesday and Wednesday at the $230 area, may provide insight into whether or not the rally will continue after its stellar earnings report.