When a company starts doing all the right things, then following Price Action helps in spotting the opportunity at the right price and the right time.
Case Study: Microsoft
The Microsoft Turnaround Journey started way back in 2014
Microsoft is no more a Windows company. Satya Nadella has transformed it into a CLOUD company.
— Deepak Singh (@smarket) October 24, 2014
Many say that Microsoft bull market has just started...MSFT chart over last 2 yrs pic.twitter.com/OoIw24SHBn
— Deepak Singh (@smarket) December 20, 2014
One of the usual reaction after watching the above chart - Oops missed the move. Let's find another idea without realizing that best move comes in later stages of the bull market
January 2015: Turnaround is not a one-way journey.
Microsoft stock down 10%...windows is losing game now. Pretty impressive growth in Cloud business.
— Deepak Singh (@smarket) January 27, 2015
The transition is painful
Microsoft Corp.’s stock logged its biggest one-day dollar decline in nearly 15 years-wiping out $34.7 billion in stockmarket value yesterday
— Deepak Singh (@smarket) January 28, 2015
April 2015: But as it happens in a turnaround - Microsoft stock made a big comeback few months later
Microsoft making a big comeback last week. The company well positioned to become a leading cloud player pic.twitter.com/pxaCeyfOqF
— Deepak Singh (@smarket) April 27, 2015
Yes the strategy was working
Microsoft after 10 long years in denial doing the same. Satya Nadella is on path to become Louis Gerstner of Microsoft.
— Deepak Singh (@smarket) May 8, 2015
October 2015: Now the turnaround resulted in a big bang breakout - THE OPPORTUNITY TIME
— Deepak Singh (@smarket) October 24, 2015
Feb 2016: THE OPPORTUNITY TIME
Generally when a stock makes this kind of move - people think they have missed the bus. Not really, this is where the focus on price action counts. Microsoft presented the opportunity - Logic: Gap Filling.
I covered this Buy signal when it happened:
What Microsoft stock did after presenting the opportunity - the chart speaks for itself
It's easy to analyze post fact but I covered this whole journey of Microsoft turnaround on twitter and the price action opportunity right here on stateofthemarket.net at the right price and the right time.
The objective of writing this post is to illustrate how fundamentals and technicals can be combined to spot an opportunity.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers