Tuesday, November 29, 2016 2:33 AM EDT
It is no secret that we love momentum stocks. There is always a good reason for stocks to have a momentum chart, like the ones shown in this article. Visibly, cloud stocks Microsoft and Adobe are darlings of the market, and we believe for a very good reason.
First, financials of both companies look awesome. Readers can check the EPS, revenue growth and profitability margins to get a confirmation of strong financials (check Adobe (ADBE), check Mirosoft (MSFT).
Second, the chart setup of both companies is truly great. The market is rewarding companies with such a beautiful setup ONLY if they really deserve it.
Both technology companies have positioned their portfolio of products in the cloud in recent years, which is where the next generation growth in software space will take place. Both companies can really be considered cloud stocks.
We are convinced that the above points are the key reasons which ‘explain’ the long term momentum chart pattern of both Microsoft and Adobe. As long as we get a confirmation that ‘risk assets’ remain in favor, as explained in Markets Outlook for 2017, both cloud tech stocks are a strong buy in 2017.
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