Microsoft Stock Forecast: Why Are We Bullish On Microsoft? Algorithmic Analysis

Microsoft Stock Forecast: An Algorithmic Perspective

The article was published on Sep 24th  2014 in Seeking Alpha

While algorithmic analysis is not to be considered conclusive, it can prove a useful tool when combined with traditional techniques.

I Know First uses an advanced self-learning algorithm based on artificial intelligence, machine learning, and artificial neural networks to predict the flow of money in almost 2000 markets from 3-days to a year. This algorithm provides traders with a trend they can use to identify when to enter and exit the market; though it may be used for intra-day trading, the predictability of this trend becomes stronger in 1-month, 3-month, and 1-year forecasts; as such, it can – when coupled with traditional analysis and careful reasoning – effectively be used to analyze the value of such stocks as MSFT. While I Know First’s algorithm should not be regarded as a stand-alone testament to MSFT’s value, the algorithm has seen an unusually high degree of accuracy, and as such is, at least, a useful complement to independent analysis. I Know First has been particularly successful in this regard: in fact, MSFT has risen by more than 26% since our last article concerning the company (which predicted a bullish signal in February 2014). MSFT was also selected as our best dividend stock based on algorithms projected for growth in 2014

I Know First also succeeded in predicting MSFT’s progress over a three-month period from June 13th through September 13th, 2014 (Figure 3).

Figure 3. I Know First successfully predicted MSFT’s strong bullish trend for three months in June 2014. I Know First’s June 13th forecast is shown on the left; MSFT’s actual performance is shown on the right. Microsoft’s ticker ((NASDAQ:MSFT)) is boxed in magenta on the left.

The new forecast generated by the I Know First algorithm, updated on September 21st, is shown below (Figure 4). Bright green signifies a highly bullish signal; light green also indicates that the forecast is bullish, but not as strongly so. Bright red, in turn, signifies a bearish forecast; correspondingly, light red indicates a bearish forecast as well, but not as negative a forecast. Each compartment contains two numbers: the strength of the signal itself (represented by the number in the middle of each box, to the right), and itspredictability (found in the bottom left corner, this is the approximate level of confidence the algorithm has in the forecast). Taking all this into consideration, the ticker symbol for Microsoft Corporation – “MSFT” – may be seen as strongly bullish in the 1-month and 3-month time frames (Figure 4).

Figure 4. I Know First’s most recent 1-month and 3-month forecasts for Microsoft. MSFT is boxed in blue, and shown to be strongly bullish. Please note that a negative predictability indicates high risk.

This bullish forecast for the short term coincides well with recent developments in MSFT’s plans, its solid yield, and its branching out into new technologies. Given analysts’ frequent “Buy”, “Outperform”, and “Hold” recommendations, and MSFT’s drastic self-improvement activities over the course of the last four years, it may be wise to carefully consider MSFT, and possibly even make a purchase.

Read the full article in Seeking Alpha