By Schaeffer’s Investment Research
Publication Date: 2026-02-19 19:40:00
Software giant Microsoft (MSFT) continued to pull back after a post-earnings drop of 10.1% on Jan. 29, and is now down 17.5% in 2026. For those looking to buy in on the dip, however, MSFT looks like it’s finally ready for a short-term bounce.
Last seen trading at $399.00, the stock has been consolidating around the $400 region. This area provided a ceiling of pressure in March and April, before a 7.6% post-earnings bull gap on May 1. Furthermore, the stock has pulled back to its 40-month moving average, a historically bullish trendline.
According to Schaeffer’s Senior Quantitative Analyst Rocky White, MSFT is within 3% of its 40-month moving average (but still above it) after closing above it for the past five months. Within this criteria, 10 other signals have occurred over the past 20 years, with the stock higher one month later after 80% of them and averaging a 5.7% gain. The shares were also higher 80% of the time three months later, with an average 13% gain.
Lastly,…
