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To: Paul Engel who wrote (112208)	10/3/2000 1:09:16 AM
From: puborectalis	Read Replies (1) \| Respond to of 186894

Technical Analysis: Microsoft May Fall to $50, Could Drop as Low as $33 Toronto, ONT, October 3 /SHfn/ -- Many pundits heralded last week's Supreme Court decision that the Microsoft [MSFT] appeal would first be considered by a lower court. Even as some proclaimed it a resounding victory for the embattled software giant, others questioned the relevance of the decision--and of Microsoft itself. Technical analysis, too, points to problems ahead, especially in the short-term. Today, Microsoft traded down slightly, to around $58 a share. Microsoft rang up $22.9 billion in revenue in fiscal 2000, an increase of 16.3% over 1999. Earnings rose 17.5% to $1.81 a share. But a well-documented slowdown in sales of both PCs and Windows software could spell trouble ahead. More worrisome, according to an August Barron's article, is the resulting decrease in Microsoft's operating earnings. "Lawsuit or no lawsuit," says author Mark Ververka, "expecting Microsoft to perform as well in the era of the wireless Internet as it did in the PC's heyday is unrealistic at best." The company's stumbles in the burgeoning interactive television market, where it has invested billions of dollars, could also prove costly. "Because Microsoft has failed to deliver a reliable system on schedule…Cable companies are considering--and even signing up with--rivals," warned Business Week in September. Similar setbacks confound the company's e-business software offerings. In a press conference last week, Microsoft announced that its BizTalk Server 2000, which was originally scheduled for release in early 2000, faced a second holdup that would delay the product until 2001. Competitors like Sun [SUNW] and Oracle [ORCL], who already provide similar products, are no doubt rejoicing. Looking at Microsoft's prospects from the standpoint of technical analysis provides investors with exit advice rather than a buy recommendation. Although Microsoft is clearly oversold, and has been so for the past month, it appears likely that its share price is headed even lower. The stock price appears to be in a final descending stage, and is trading some 15 points below its 30-week moving average. Trading below its 30-week moving average usually indicates a negative trend for a company's share price. Any rally attempts by Microsoft should be viewed as selling opportunities. Today's closing price below $60 could send the price down even further, to the 38% Fibonacci fan line support level of $50. Microsoft does appear to have a lot of support there. However, a technical measure of the descending channel that's clearly visible on the weekly three-year chart suggests a potential final price target of approximately $33 in the next three to six months. Shares of Microsoft have not seen this level seen since February of 1998. Perhaps there the stock will finally find a bottom.