Microsoft is set to surge after it reports earnings, predicts one trader who could make more than five times his money off a Microsoft bet.
Microsoft has surged more than 19 percent since its Brexit low in June. And though the stock has traded in a range for most of the summer, Andrew Keene of AlphaShark sees good signs in the charts for the tech giant, especially with earnings as a "catalyst" for Microsoft.
"It has rallied five of the last eight quarters on earnings," Keene said Tuesday on CNBC's "Trading Nation." "Combine that with the chart, and I think Microsoft is going higher."
On a daily chart of Microsoft, Keene says that the stock has consolidated since jumping off of the company's last earnings beat in July. While Microsoft has been trading in a range of $56 to $59, the stock has generally managed to stay above its 50-day moving average, which indicates to Keene that this smoothing mechanism is serving as support.
Meanwhile, Microsoft's weekly chart shows what Keene terms a "bull channel," and based on that trend, Keene believes that Microsoft could be headed to $62.50. In other words, Keene sees Microsoft climbing more than 8 percent in the short term, especially if the company's past earnings trends repeat.