Microsoft Corp (MSFT)

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Microsoft (MSFT) Options traders are chiming in on quarterly results
By: Schaeffer's Investment Research | January 25, 2023

Microsoft Corp (NASDAQ:MSFT) is down 3.8% at $232.89 at last check, despite the tech name yesterday announcing better-than-expected fiscal second-quarter profits of $2.32 per share, thanks in part to strength in its cloud business. Nevertheless, revenue missed the mark, and prompted Microsoft to issue a dismal fiscal third-quarter revenue forecast.

At least six brokerages have slashed their price targets on MSFT in response, with J.P. Morgan Securities lowering its objective to $265 from $275. However, two other raised their price targets. Still, 25 of the 29 firms in coverage call Microsoft stock a "buy" or better.

Options traders are chiming in as well, with 250,000 calls and 254,000 puts across the tape so far, which is three times the average intraday volume. Most popular is the weekly 1/27 230-strike put, followed by the 225-strike put in the same series, with positions currently being opened at both.

The options pits have displayed an appetite for bearish bets of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day put/call volume ratio that sits in the 99th percentile of its annual range.

Digging deeper, Microsoft stock has once again run into a ceiling at the $245 level, after failing at that level twice in December. Shares are also slipping back below their 40-day moving average, after briefly conquering the trendline to start off the week, as they add to their 19.4% year-over-year deficit.

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