The security is trading near a historically bullish trendline
Microsoft Corp (NASDAQ:MSFT) was last seen down 2.4% to trade at $459.49 at last check, taking a backseat after rival Alphabet (GOOGL) hit a $4 trillion market cap on the heels of its multi-year AI partnership with Apple (AAPL). Shares are now on track for a third-straight loss, and earlier slipped to their lowest level since June. There is still hope for a rebound, however, as this pullback has placed MSFT near a trendline with historically bullish implication.
Digging deeper, MSFT has pulled back to its 260-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White, the equity is within 0.75 of the trendline's 20-day average true range (ATR), after remaining above it 80% of the time in the past two weeks and 42 trading days. This signal has occurred nine other times over the past 10 years, after which the security was higher one month later 78% of the time with an average 3.8% gain. A move of similar magnitude would send MSFT above $477.
Options traders already lean bullish, per the security's 50-day put/call volume ratio of 2.11 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 72% of readings from the last year.
Options are looking extremely affordable, too. This is per MSFT's Schaeffer's Volatility Index (SVI) of 30% ranks in the 34th percentile of the last 12 months.