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Microsoft loses $232 billion in market cap in 7 days – watch for this 'buy zone,' trader says

VIDEO4:2004:20
Trillion-dollar tech stocks take down market

Microsoft is fighting back Friday after a nasty week.

Friday afternoon, shares were slightly positive, trading above $158, but were still down 11% since Monday as fears spiked over the severity of the coronavirus outbreak.

In the past seven trading sessions, Microsoft shed $232 billion in market cap.

Todd Gordon, managing director of Ascent Wealth Partners, says it's nearing the time to jump back into the stock.

"I like Microsoft in terms of pulling back here, adding some exposure," Gordon said Thursday on CNBC's "Trading Nation."

Gordon warns that it could get down to the 200-day moving average and possibly overshoot it before bouncing back.

"It's gravitating around the $145 mark, so if we're going to leg in, we want to do so carefully with that in mind," said Gordon. From $145 to $150, "that's your buy zone in Microsoft."

The upper end of the buy zone would take it down to levels not seen since mid-December.

"It's a stock that's working. It has beat earnings six of the last seven reports. I think a lot of people are underinvested, and I think this is an opportunity for those who've missed as the market has been quiet for two years," he said. "To get into the pullback I'd say stick with what's working."

Microsoft isn't the only mega-cap stock leading losses over the past week. Microsoft, Apple, Alphabet, Amazon, Facebook and Visa have lost a collective $1 trillion in market cap in seven trading sessions.

John Petrides, portfolio manager at Tocqueville Asset Management, warns that investors could have more exposure to these names than they believe.

"When you have the top five companies in the S&P 500 [Microsoft, Apple, Amazon, Alphabet and Facebook] making up 18% of the index … and you have the highest concentration of sector and stock exposure since the dot-com bubble, I would say people have more exposure to this [tech] sector and to these names than … they probably even realize," Petrides said during the same segment.

As of Friday, Alphabet, Apple and Facebook are negative for the year and Microsoft and Amazon are holding on to slight gains.

Disclosure: Ascent Wealth Partners holds Microsoft. 

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