Trading Strategies for Microsoft Stock Before And After Q2 Earnings

Microsoft Corporation MSFT is set to print its second-quarter 2023 financial results after the market closes on Tuesday. The stock was trading slightly lower heading into the event.

When the tech giant printed its fiscal first-quarter results on Oct. 25, the stock fell in after-hours trading and gapped down almost 8% the following day.

For that quarter, Microsoft reported an EPS of $2.35 on revenue of $50.1 billion. Both numbers beat the consensus analyst estimates of $2.32 and $49.8 billion, respectively.

For the second quarter, analysts estimate Microsoft will print earnings per share of $2.30 on revenues of $52.97 billion, according to Benzinga Pro.

Ahead of the print, Wedbush maintained its Outperform rating and $290 price target for Microsoft shares... Read More

From a technical analysis perspective, Microsoft’s stock looks set to rise over the coming days due to an inside bar the stock has developed within an uptrend. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Options traders, particularly those who are holding close dated calls or puts, take on extra risk because the institutions writing the options increase premiums to account for implied volatility.

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The Microsoft Chart: Microsoft’s inside bar leans bullish because the stock was trading higher before forming the pattern. Traders and investors can watch for the stock to break up or down from Monday’s trading range in the after-hours session on Tuesday to gauge future direction.

Microsoft is trading in an uptrend, with the lower high formed on Jan. 19 at $230.68 and the higher high printed at the $242.38 mark on Jan. 18. If Microsoft receives a bullish reaction to its earnings print and breaks up from the inside bar pattern, the uptrend will be intact.

If Microsoft flies higher following its earnings print, it may find resistance at the 200-day simple moving average (SMA), which is trending at about $255. On Tuesday, the stock was holding above the 50-day SMA, which is a positive sign for the bulls.

If Microsoft suffers a bearish reaction to the print and trades under $231, the uptrend will be negated and a downtrend may form.

Microsoft has resistance above at $243 and $249 and support below at $238.42 and $233.47

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