The rally came after Microsoft announced a $40 billion share repurchase plan and raised its quarterly dividend by 11% to 51 cents per share. While the hike is generous, shares of Microsoft yield just 1.45% at current prices, part of which is due to the stock's big rally.
So far in 2019, Microsoft stock is up almost 40%, while shares are up 65% since the start of 2018. Over the past three years, Microsoft has more than doubled, rallying 147%.
Of its FAANG competition, only Netflix (NFLX) - Get Report has done better over the last three years, rising 187%. Still, Microsoft beat Amazon (AMZN) - Get Report , Apple (AAPL) - Get Report , Facebook (FB) - Get Report and Alphabet (GOOGL) - Get Report(GOOG) - Get Report in that time.
It's also worth noting that of all the stocks above, Microsoft also has the largest market cap, at $1.08 trillion. This edges the next closest, which is Apple and its $1.005 trillion market cap. With Thursday's move to new highs, it's no wonder Microsoft is RealMoney'sstock of the day.
With Microsoft leading the mega-cap tech pack, can the share price maintain momentum?
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Trading Microsoft Stock
Microsoft stock has formed an ascending triangle, where uptrend support (blue line) continues to squeeze the share price up against a static level of resistance (black line).
In this case, resistance was around the $140 to $141 area. Investors now need to see this former resistance level turn into support.
It is somewhat discouraging to see the stock backing off its morning session highs. Without that bullish follow-through, it makes it harder to trust that this breakout has any staying power.
For that reason, many traders will wait until the close on Thursday to see if this breakout "sticks." It will do so if it closes north of resistance and again trades higher on Friday. Bulls would love to see MSFT stock finish near its session highs on Thursday.
Should the breakout continue, Microsoft surely has room to run as it's been consolidating for several months. If this turns out to be a false breakout, though, bulls are not completely out of luck.
While the 20-day and 50-day moving averages have not done much in terms of support lately, they come into play near uptrend support, which
been strong support. As long as MSFT stock is above these marks, it looks OK. Below $136 will raise some concern, though.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.