Microsoft stock dipped on Wednesday on worries of a ‘limited access’ data hack. Here’s how to trade the stock now.
Yesterday it was Okta (OKTA) – Get Okta, Inc. Class A Report. Today’s it’s Microsoft (MSFT) – Get Microsoft Corporation Report.
On Tuesday, Okta disclosed a potential data breach from hackers that appeared to have taken place in January. The news came amid increasing cyber attacks as geopolitical tensions continue to rise.
Now on Wednesday, Microsoft says that those hackers gained “limited access” to some of its systems.
No customer code or data was involved in the LAPSUS$ breach, which effectively involved only one compromised account, Microsoft said.
Given the company’s $2.25 trillion market cap, this isn’t exactly news that should worry long-term investors.
But headlines like this come at a time when tensions are high amid Russia’s attack on Ukraine and when many tech stocks are entrenched in nasty pullbacks.
At one point, Microsoft stock was down about 2% on the news and broader weakness in the market. The stock has since reduced those losses to less than 1%. Let’s look at the chart to see if there’s any clarity.
Trading Microsoft Stock
Daily chart of Microsoft stock.
Chart courtesy of TrendSpider.com
While Microsoft stock was moving lower this morning, the shares have been enjoying quite the run lately. Coming into Wednesday, the stock had rallied in five of the previous six sessions, climbing more than 10% from last week’s low.
But we’re now into an important area on the chart — which makes the reaction to today’s news even more notable.
Over the past few days, Microsoft stock has rallied into the 50-day and 200-day moving averages, as well as the prior March high near $303 and the big breakout level at $305.
I don’t like to put all my hope on one level. Instead, I like a confluence of levels and measures. Why? Because it increases the odds that support or resistance will hold and if it doesn’t, then it speaks to the respective strength or weakness of the move.
In the case of Microsoft stock, I want to see whether it can shake off the bad news and ultimately clear this week’s high and $305. If it can, it opens the door to the $318 to $320 area. There it finds prior support and the 61.8% retracement of the correction.
If the $300 to $305 area holds as resistance, let’s see if some of the short-term moving averages can buoy the stock.
Below $290 could put $283 back in play, followed by clear support between $270 and $275.
