It seems like technology is everywhere, right? We have smart phones, smart watches, smart TVs, smart refrigerators … you get the idea.
Well, if you think technology is everywhere right now, just wait. We’re just getting started down the path toward global inter-connectivity, and Microsoft (NASDAQ:MSFT) is putting itself right in the middle of all of it. The company is working especially hard to become ubiquitous in the business world, and its recent successes make a good case for a bullish put write trade.
New Partnerships Could Lead to More Market Share
MSFT will be integrating its Azure platform with the DIS’s StudioLAB, which gives MSFT a powerful connection to the all important media and entertainment industry. StudioLAB is a studio space in Burbank intended to “use Silicon Valley-style experimentation” to develop new ways to make films. A high-profile partnership like this is a big win for MSFT, and it will likely benefit the stock.
The partnership with rival ORCL could help MSFT claim more market share from Amazon Web Services. Amazon’s (NASDAQ:AMZN) cloud computing business is the dominant force in that sector right now. By integrating its Teams platform with ORCL’s Digital Assistant and Oracle Cloud applications, MSFT makes itself that much more appealing.
Partnerships like these, coupled with MSFT’s dominance in consumer computer and gaming markets, should solidify the company’s ability to generate steady revenue and earnings growth. That’s why Wall Street loves this stock so much.
Consolidating Above $133
During the past month, we’ve seen just how consistently bullish traders are on MSFT. While the rest of the market pulled back in early August, MSFT held steady. It has been consolidating above support at $133 — with the exception of closing below this level on Aug. 5th — for three months.
Daily Chart of Microsoft (MSFT) — Chart Source: TradingView
We expect the $133 support level to hold for at least the next few weeks, making it an excellent strike price for a put write trade.
To find out which MSFT covered calls we’re selling—and to get access to our full portfolio of income-generating trades—sign up for a risk-free trial of Strategic Trader today.
InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.