Here’s a preview of what I’ll be discussing on Talking Numbers today between 3:20 and 3:30 pm EST on CNBC:
Dan mentioned MSFT’s weakness in the Morning Word today, with the caveat that MSFT still has a sterling balance sheet with a strong dividend. Looking at the technicals, MSFT is clearly in a vulnerable position in relation to other large cap tech stocks. Taking ORCL as an example, let’s compare the 5 year charts.
ORCL has been a strong long-term performer. On the 5 year chart of ORCL, you can see the horizontal red line that I’ve drawn at the 2007 highs around $24. ORCL is currently trading almost 30% above that level, indicating the long-term outperformance of the company. In the short-run, ORCL recently made a new high for 2012, indicating a nice 6 month uptrend as well.
In contrast, MSFT is trading well below its highs from 2007, indicating declining long-term prospects. The stock is also in a short-term downtrend, as it was unable to breach its spring highs in 2012, registering a lower high on the recent QE3 rally. Both short run and long run trends point against Softie.
The death of the PC has certainly taken its toll. The odds seem stacked against MSFT in orchestrating a long term turnaround, especially if reviews of Windows 8 are any indication.