Hi Traders!
It’s Tuesday, October 27, and Mag 7 earnings week is moving into its biggest reports. This is the week I prepare for as the most volatile week of the quarter. As I highlighted in my earnings calendar on X, Alphabet (GOOGL) and Microsoft (MSFT) report tomorrow, with Amazon (AMZN) following on Thursday. Their reactions could be the catalysts that determine the Nasdaq’s next meaningful move. Microsoft earnings are my main focus: the company’s buyout offer puts its expenses, AI strategy, and next growth outlook in the spotlight.
Heading into this week, my read is that the Nasdaq is oversold and the put/call ratio has become extended to the upside. That tells me sentiment has become stretched toward fear, and it’s time to watch for a reversal. I’m looking for buyers to confirm that setup, and earnings from the Mag 7 names I’m bullish on could provide the spark. Microsoft is at the top of that list, and I’m watching whether its earnings reaction can help turn the Nasdaq’s oversold setup into a recovery.
Semiconductors have taken a beating, but cybersecurity looks phenomenal to me. I bought HACK on Friday, October 23. I’m still bullish on semis over the long term, while looking for relative strength and opportunities elsewhere as that group works through its pullback.
You can explore the cybersecurity ETFs and their holdings in the new cybersecurity section of my Five Star Market Map. It’s a useful way to see which companies sit inside a theme before deciding how you want exposure.
Microsoft’s Buyout Offer: What 60,000 Eligible Employees Means
The Microsoft earnings report arrives tomorrow, Wednesday, October 28, after the close. Yesterday, Monday, October 26, the company announced a voluntary exit program. Microsoft confirmed to GeekWire that about 60,000 employees are eligible. That is the number receiving an opportunity to take a buyout; the eventual number of departures is still unknown.
From a stock perspective, I view the potential reduction in recurring payroll expenses as bullish for Microsoft. If the company can continue to grow its cloud and AI businesses while operating with fewer employees, that will substantially increase profitability. The combination of revenue growth and tighter expense management is what interests me going into earnings. This, combined with leadership in the AI space, will continue to push Microsoft stock higher.
There will be upfront costs associated with employees taking the packages. The financial benefit depends on participation, the cost of those exits, and whether the work can be done effectively without replacing those positions. However, these one-time buyout deals are a drop in the bucket for what Microsoft will save going forward.
Microsoft Earnings: Key Tests for My Bullish Thesis
The Microsoft report will feature highlights from these key points:
- Cloud and AI growth
- Expenses and margins
- AI spending and cash flow
- AI Product Segment Growth
Together, those details will help me judge whether Microsoft earnings strengthen the case for owning the stock. The chart will determine how I approach a trade.
MSFT: Last Quarter’s Breakaway Gap Is My Reference
Last quarter’s Microsoft earnings produced the breakaway gap that has my attention heading into this report. My chart labels the gap following the July 29 report at 12.1%, or $47.36. Today’s intraday snapshot shows MSFT near $531, with the chart’s prior high marked at $555.45.
For this report, I’m watching the relationship between price, the prior earnings gap, and the next areas of support and resistance, which is at the all-time high. If MSFT gaps higher again, I want to see buyers defend the move and build on it. If a new gap gets sold and the stock loses the support I’m watching, that would weaken the bullish trading setup. That is a move that has occurred 2/4 quarters in the past, so it’s certainly possible that the previous high is resistance. Either way, I still own Microsoft, and believe it is a key Magnificent 7 leader for the future.
Last week’s META and LRCX reactions were a reminder that the headline results are only part of an earnings trade. What investors do with the news matters. I’m bullish on Microsoft’s opportunity, and I’ll use the actual reaction to decide how to trade the next move.
This is where I use my Earnings Hot Zone: Five Star Edition to review historical earnings behavior and expected-move references alongside the chart.
GOOGL Earnings: The Chart Needs Repair
Alphabet also reports tomorrow, Wednesday, October 28, after the close. Today’s chart captures GOOGL at $322.13, below the moving-average cluster around $340–$350 after its recent decline. A bullish earnings reaction would need to start repairing that damage.
My Earnings Hot Zone gives GOOGL a 5/5 historical ranking, but the issue is that the stock is stuck below critical resistance at the 200 SMA and gapped down by 6.1%. This is a bit of an ominous read. While I like the stock and own it, it is difficult for companies to see positive post-earnings moves when they are stuck below technical resistance following a negative reaction; however, it can happen. The ticker would need to experience a 1.5x-2x move to correct this downtrend. The expected-move reference displayed on this snapshot is ±$18.09. That being said, I am holding the stock, and watching $300 as a lower area of support.
AMZN Earnings: The Next Test After Microsoft
Amazon follows on Thursday, October 29, after the close. The chart captures AMZN at $254.50 and labels last quarter’s opening earnings gap at 12.5%, or $29.50. That initial strength did not prevent the stock from pulling back afterward, which is why follow-through matters to me.
The critical resistance zone is at the prior high of $287.20, with a longer-term moving-average reference below price at $243.34. Those are chart levels to watch as the reaction develops, and the chart is stuck between the support and resistance zones. They are separate from the ±$6.43 expected-move reference shown in this snapshot. I’m bullish on Amazon, and would be a buyer down into the 200 SMA at $243 in case the reaction is suboptimal. 
Watch My Monday tastylive Segment
I joined tastylive’s Trade of the Day on Monday, October 26, to discuss the Nasdaq, Microsoft and Amazon heading into earnings, and why cybersecurity’s relative strength has my attention. I also walked through a CrowdStrike call butterfly example.
My Monday, October 26 appearance. tastylive published this YouTube replay on October 27.
Watch My Full tastylive Segment →
- 1:34 — Microsoft and Amazon Into Earnings
- 8:19 — Why I’m Watching Cybersecurity
- 9:04 — The CrowdStrike Trade Example
AI: The Bigger Picture for Workers and Investors
The Microsoft story also raises a much bigger issue. My view is that this foreshadows changes we’ll continue to see across technology: companies using AI to take over more tasks and, over time, operate with fewer people in some roles.
Microsoft describes this program as a way for participating teams to adapt to changing needs. My expectation that AI will replace more work across tech is my broader investment thesis; the announcement does not establish that every eligible employee’s job is being replaced by AI.
That’s why I believe it’s so important to keep learning how to trade and invest, build assets, and develop ways to earn beyond a single employer’s paycheck. We can study the companies benefiting from this transition while also becoming more capable of managing our own financial futures.
For me, that means trading short-term opportunities while continuing to build long-term stock accounts. These are skills developed through preparation, practice, and risk management. Market returns are uncertain, so I approach them as part of building financial flexibility over time.
Mag 7 Earnings Week: The Calendar I’m Watching
Here are the names I highlighted in my X post. The week’s opportunities extend beyond the three Mag 7 companies, with reports across software, cybersecurity, semiconductors, storage, and other industries.
- Tuesday, October 27: BA, UPS, SOFI, STX, TER, HOOD, and FFIV.
- Wednesday, October 28: GOOGL, MSFT, FTNT, and NOW.
- Thursday, October 29: LLY, AMZN, INTC, and SNDK.
- Friday, October 30: XOM and CVX.
Use my Options Earnings calendar to check reporting dates and sessions as you prepare. Knowing which stocks report—and which industries they belong to—helps me anticipate where the next catalyst may appear.
What I’m Watching Next
My focus is whether this oversold setup can turn into a sustained recovery. For the Nasdaq, I want to see buyers reclaim broken support and then defend it. For Microsoft, I’m watching the prior earnings-gap area, the new report, and whether the stock attracts follow-through buying.
I’m also watching whether cybersecurity maintains its relative strength as FTNT reports, and whether the next round of semiconductor and storage earnings helps stabilize those groups. My HACK purchase gives me exposure to a theme I like while I continue evaluating opportunities in the companies reporting this week.
I’ll be following Microsoft earnings, the other Mag 7 reactions, and the support levels that shape my next trades. Join me in Simpler Trading’s Mastering the Trade room as I work through these setups and the stocks on my watchlist.
