Can Microsoft Corporation (MSFT) Recover by Week's End?

Microsoft Corporation (MSFT) calls are again popular today

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Published on Mar 12, 2015 at 12:38 PM
Updated on Apr 20, 2015 at 5:32 PM

Reduced sales guidance from Intel Corporation (NASDAQ:INTC) is weighing on fellow tech blue chip Microsoft Corporation (NASDAQ:MSFT) today. This afternoon, shares of the latter are 1.9% south of breakeven to hover near $41.20 -- but at least some options traders are banking on a short-term rebound.

At last check, intraday option volume for MSFT was nearly double the expected amount. The most active contract by far is the weekly 3/13 41.50-strike call, and it appears speculators are purchasing fresh positions here. In other words, these buyers are expecting the stock to rebound above $41.50 by tomorrow's closing bell, when the series expires.

From a wider sentiment perspective, call buying has prevailed in MSFT's options pits recently. The stock's 50-day call/put volume ratio of 2.11 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 96th percentile of its annual range. In other words, traders have bought to open calls over puts at an accelerated clip in recent months.

Technically speaking, though, Microsoft Corporation (NASDAQ:MSFT) has started off 2015 on the wrong foot. Year-to-date, the shares have tumbled more than 11%. Should the aforementioned option bulls start to hit the exits, it could result in headwinds.


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