Microsoft Corp (NASDAQ:MSFT) shares dropped 2.4% to $459.49 in recent trading, marking a third consecutive decline and reaching their lowest point since June. The move followed Alphabet (GOOGL) achieving a $4 trillion market capitalization, bolstered by its multi-year AI collaboration with Apple (AAPL).
The stock's decline has brought it close to its 260-day moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, MSFT is within 0.75 of the trendline's 20-day average true range (ATR). Over the past two weeks and 42 trading days, the equity has remained above this level 80% of the time.
Historical data indicates that similar signals have occurred nine times in the last decade. In those instances, the stock was higher one month later 78% of the time, with an average gain of 3.8%. A comparable increase would push MSFT above $477.
Options activity suggests bullish positioning. The security's 50-day put/call volume ratio of 2.11, tracked at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), stands higher than 72% of readings from the past year.
Options appear relatively inexpensive. Microsoft's Schaeffer's Volatility Index (SVI) of 30% ranks in the 34th percentile over the last 12 months.