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UPDATE: Fast Money 360: Microsoft

Considering shares of Microsoft are down about 20% over the last 3 months, how should you game this stock ahead of earnings, Thursday?

Seems like a good time for Fast Money 360.

Find out what fundamentals, technicals and insights from the options world all suggest lie ahead for this stock.

FUNDAMENTALS

Brent Thill of UBS sees a lot of potential in Microsoft due to fundamental catalysts that could benefit the software giant.

”First, there's a favorable backdrop in terms of PC and server sales. Second, Microsoft's product line is in the best shape it's been in, over the last 5 years, “ he says.

The third reason is quite simply valuation; he thinks the stock is cheap. ”Microsoft is trading at the low end of its historical valuation range.”

“We're buyers into the print,” he says.

CHARTS

Carter Worth of Oppenheimer is equally bullish; in fact he predicts between 5-10% upside.

“The April-July sell-off from $32 to $23 was extreme,” he explains however patterns in the charts are decidedly better recently; they show the selling has stabilized.

If Microsoft puts up decent numbers , “I think it makes run to $27 in,” he concludes.

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OPTIONS

Jon Najarian of OptionMonster is expecting a big move after earnings.

“Options are pricing in about a 4% move,” he explains. But I think it’ll move more than that.”

Fundamentally, Microsoft is well positioned ahead of an expected PC upgrade cycle, he says, and should put up strong numbers.

Combine the options and the fundamentals and “I’m buying this one ahead of earnings,” he concludes.

What's the takeaway?

I'm not a big fan of Microsoft but with the refresh cycle coming I think the stock will do well, says Brian Kelly.

I think it's put up or shut up time for Microsoft, says Guy Adami. If they don't crush right now when will they?

My clients sell Microsoft into any rally, so yes it’s due for a pop, but every time it rallies it’s met with an onslaught of selling, adds Steve Grasso.



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Trader disclosure: On July 21, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BAC), (FCX), (GOOG), (MOS), (SBUX); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Terranova owns (EMC), (CREE), (CRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (GLD), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL); Pete Najarian owns (C) calls; Pete Najarian owns (CRUS) calls; Pete Najarian owns (ISRG) call spreads; Pete Najarian owns (DD) call spreads; Pete Najarian owns (GNW) call spreads; Pete Najarian owns (V) call spreads; Pete Najarian owns (CNI) call spreads; Pete Najarian owns (TEVA) call spreads; Pete Najarian owns (PFE) call spreads; Kelly owns (BP) puts; Kelly is short (GS)

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