The Elder Statesman of the Software Industry

With the technology sector, we know software has been as hot as any group in the market of late, sporting plenty of charts basing high and tight after recent rallies. Moreover, the industry is ripe for further M&A, with plenty of attractive targets offering impressive earnings and revenue growth for larger firms to gobble up. 

Microsoft, of course, is clearly beyond the up-and-comer phase of its brand. But if the elder statesman in the group commences a fresh leg higher now, it would be just another notch in the software bulls' belt regarding the underlying strength for all things software in this market. 

On the updated monthly chart for "Mister Softee," below, after earnings we can see the stock threatening to leave its prior dot-com bubble, all-time highs in the dust as newfound support. Such a move would be incredibly impressive, but MSFT has, after all, had plenty of time since last November 2015 to come to terms and deal with the overhead supply from that significant prior top. 

Recall that the concept of overhead supply is not a license to call a top, but rather serves as a high probability setup for an initial, expected pause before the next directional move, up or down, commences. Here, MSFT has had its initial expected pause for a few quarters and has a good chance to add credence, given its market cap and gravitas, to the bull case for a meaningful leg higher in software which just may be underway.