Microsoft’s stock has no doubt been on a surprising reversal, one that has positioned it for a 7-day winning streak that is keeping investors on their toes. In pre-market trading on Thursday, the stock had climbed to $469.9, recovering after hitting a low of $464 on Tuesday. This positive momentum represents a week-to-date increase of 2.2%. Strong U.S. employment numbers and improving trade relations between the U.S. and China are fueling this expansion.
The final spark to this market optimism was the October U.S. nonfarm payroll report, showing stronger-than-expected overall job growth. Analysts were expecting a much smaller gain, but the numbers reported far outpaced expectations, giving a much-needed shot of confidence to markets. As a consequence, numerous investors reallocated their portfolios towards bigger stocks considered more stable and more growth oriented like Microsoft.
The good jobs numbers have added fuel to rampant positive sentiment in the market. At the same time, improving relations between the U.S. and China has added to this positive climate. After several months of negotiations and talks to smooth out trade relations, the news fueled a healthy investor reaction, sending the stock soaring and fueling the momentum even more. The confluence of these factors has turned a bullish sentiment around Microsoft, encouraging everyone under the sun to predict years of accelerated growth.
Last Friday morning, Microsoft immeasurably as much as 0.6% up within the premarket session, an indication that the top is on investors’ consideration. The stock price immediately jumped above its high from last Thursday of $469.6, confirming its new bullish trend. Analysts noted the stock’s consolidated above the key 50% Fibonacci retracement. This technical indicator is very bullish and shows strong potential for further gains.
The Relative Strength Index (RSI) for Microsoft is nearing overbought territory. This points at the possibility that the stocks has reached its ceiling already. Nonetheless, the technical trend in the stock has created a target of $480, which many traders are closely focused on. Meanwhile, Microsoft’s market capitalization approaches $3.5 trillion. In the process, it’s cementing its status as one of the world’s most valuable companies.
In a moment of market volatility in the stock market, Microsoft’s performance is a bright spot and example of strength. A combination of solid job growth and improved trade relations has investors feeling confident. Except that this improvement is just one more example of the resilience of large-cap technology stocks in times of great economic uncertainty.