Shares of Microsoft Corporation (NASDAQ:MSFT) declined by 1.85% to close trading Friday at $296.03 amid a broader tech selloff.
On CNBC’s “Options Action,” Tony Zhang said that Microsoft has a “fairly bulletproof business and there is an opportunity going into earnings.” The company’s earnings call is scheduled for Tuesday.
Microsoft’s chart shows the stock broke out a year ago from the $230 level and has been on a “pretty strong uptrend,” Zhang noted. “Since the peak, it has pulled back about 15% back to that channel,” he added.
Microsoft’s stock has underperformed its sector since November, Zhang said. He expects a rebound in the stock, with the earnings announcement being a catalyst.
The options market is implying a move of about 5.2%, versus the 2.6% average over the past eight quarters, Zhang added.