Microsoft Stock is back in the spotlight with Morgan Stanley set to report before the opening bell on Wednesday, July 15, after a prior quarter that beat estimates and came with a significant lift in guidance. The setup has kept MS near all-time highs, and traders are watching whether the next move can push it above $227.
That matters now because the stock is already behaving like a name that investors want to own ahead of the numbers. James "Rev Shark" DePorre said TheStreet Pro Portfolio was long MS at the time of publication, and he described the name as one to "stockpile on pullbacks." TheStreet Pro rates it a Two, which is its way of saying patience matters, but the bigger picture still leans constructive.
The case for MS starts with the chart. The stock has been printing higher highs and higher lows, the GoNoGo composite in the top pane is bullish, and the parabolic SAR dots are also aligned on the bullish side. Relative strength has stayed steady, and MS has put in a nice recovery near all-time highs, which is exactly the kind of backdrop that can keep buyers interested into an earnings date.
Still, the picture is not clean. Money flow is bearish, even as the broader pattern and indicators point higher. The MACD had a bearish crossover right before the last dip, which helps explain why the recent climb has not moved in a straight line. Volume trends have slowed down a bit, too, even though turnover is expected to pick up this week as the report approaches.
There is a reason investors keep circling Morgan Stanley and Goldman Sachs when investment banks come up: they are the two remaining pure plays on the public market, and strong stock markets have been a good sign for the business. Morgan Stanley also has dealmaking, leverage and assets, along with its E-Trade acquisition, which is part of why TheStreet Pro has favored it over Goldman Sachs in this setup.
So the next test is plain enough. Morgan Stanley has already shown it can beat expectations and lift guidance, and now it has to do it again while the stock hovers near highs and traders watch that $227 level for a break higher. If the report lands well, MS has room to attract another wave of buyers; if not, the bearish money flow lurking under the bullish chart will matter fast.
