MSFT

What it measures Valuation expressed against the cash actually available to all capital providers. Often more honest than EV/EBITDA when capex is meaningful relative to D&A.

Formula EV/FCF = (market_cap + total_debt - cash) / free_cash_flow_ttm

For MSFT Cheap on free cash flow - confirm FCF is sustainable and not propped up by working capital release.

What it measures Adjusts the numerator for debt and cash so heavily-levered or cash-rich companies are comparable. Particularly useful for cross-industry valuation work.

Formula EV/Sales = (market_cap + total_debt - cash) / revenue_ttm

For MSFT Cheap on revenue when you account for the balance sheet.

What it measures How many dollars of book equity each share represents. Useful for asset-heavy businesses (banks, industrials) where book value approximates liquidation floor; less informative for asset-light franchises whose value is in intangibles.

Formula P/B = market_cap / common_equity

For MSFT Trading near or below book - sometimes a margin of safety, sometimes a sign book value will be impaired.

What it measures Multiple of trailing-twelve-month earnings the market has assigned to the company. Lower means cheaper relative to current earnings power, but a single low P/E can also mean the market expects earnings to fall.

Formula P/E = market_cap / net_income_ttm

For MSFT Cheap on current earnings - either an opportunity or a value trap if earnings are about to deteriorate.

What it measures Useful when earnings are negative or noisy (early-stage companies, restructurings). Works best within an industry because gross margin profiles vary wildly.

Formula P/S = market_cap / revenue_ttm

For MSFT Cheap on revenue - investigate whether margins are structurally low or revenue quality is poor.

What it measures Productivity of the asset base. Combined with net margin, this is the DuPont decomposition of ROA: ROA = net_margin * asset_turnover.

Formula Asset Turnover = revenue_ttm / average_total_assets

For MSFT Heavy assets needed per dollar of revenue - utilities, telecoms, capital goods.

What it measures Strips out short-term operating debt and revolver use to focus on permanent capital structure. Useful when comparing companies that fund working capital differently.

Formula LT D/E = long_term_debt / common_equity

For MSFT Permanent debt is low - balance sheet flexibility for opportunistic deals.

What it measures Direct income from holding the share. Stable dividend yield often signals capital discipline; abnormally high yield can be a warning that the dividend isn't covered by FCF and may be cut.

Formula Dividend Yield = (dividends_per_share_ttm / price) * 100

For MSFT Most of the return must come from price appreciation rather than income.

What it measures Lets you compare equity earning power directly to bond yields. A 6% earnings yield is the equity-side analog to a 6% coupon, with the difference being earnings can grow (or contract).

Formula Earnings Yield = (net_income_ttm / market_cap) * 100

For MSFT You're earning a small income yield on the cap - the rest of the return has to come from growth.

What it detects Buys oversold pullbacks within an established uptrend (price above the 200-day SMA). Holds while RSI(2) is below an exit threshold; exits when RSI(2) crosses above 60.

Trigger rule +1 when price is above regime_ma and RSI(2) drops below oversold; held while inside the trade; back to 0 when RSI(2) crosses above exit.

Parameters period=2, oversold=10, exit=60, regime_ma=200

For MSFT Active pullback-short in an established downtrend — short-term pop into resistance fading.

What it detects Bullish when %K crosses above %D while both lines are below the oversold threshold; bearish when %K crosses below %D while both are above overbought.

Trigger rule +1 on bullish cross in oversold; -1 on bearish cross in overbought; 0 otherwise.

Parameters k=14, d=3, smooth=3, ob=80, os=20

For MSFT %K crossed down through %D from overbought — short-term sell trigger.

What it detects The Parabolic SAR plots a stop-and-reverse dot above or below price; when price crosses the SAR, the trend side flips. The signal fires on the flip bar.

Trigger rule +1 on flip from above-price (bearish) to below-price (bullish); -1 on flip the other way.

Parameters accel=0.02, max_accel=0.2

For MSFT SAR flipped from below to above price — switch to short bias.

What it detects While price is above its 200-day MA (uptrend regime), buy when today's close is the lowest in 7 sessions; exit when today's close is the highest in 7 sessions.

Trigger rule +1 on entry day (new 7-day low above regime); held until exit on new 7-day high; back to 0 on exit.

Parameters lookback=7, regime_ma=200

For MSFT Active short setup on the bearish mirror — fade the 7-day high in a downtrend.

What it detects Finds two or more pivot highs (tops) or lows (bottoms) within a price tolerance and minimum bar separation. Confirmed multi-bottom is bullish; multi-top is bearish.

Trigger rule +1 at confirmation of a multi-bottom (price retests prior low and holds); -1 at confirmation of a multi-top.

Parameters peak_count=2, tolerance=0.02, min_sep=10

For MSFT Price retested a prior high and rolled — multi-top resistance confirmed.

What it detects A wedge is a price compression where two trendlines converge. Rising wedge (both lines sloping up but upper less steep) typically resolves down; falling wedge resolves up.

Trigger rule +1 on confirmed break above falling wedge; -1 on confirmed break below rising wedge.

Parameters lookback=40, min_touches=2

For MSFT Rising wedge resolved down — compression broke in favor of sellers.

What it detects OBV cumulates signed volume - rising OBV reflects accumulation, falling OBV distribution. Same pivot-pair rule as RSI/MACD divergence: when price makes a new low but OBV doesn't, big-money has stopped selling.

Trigger rule +1 at right-hand pivot of (price lower-low, OBV higher-low); -1 at right-hand pivot of (price higher-high, OBV lower-high).

Parameters pivot_window=5, lookback=60

For MSFT Distribution beginning even as price breaks higher — smart money may be quietly exiting.

What it detects Enters +1 when close <= lower band, holds until close >= middle band. Symmetric short-side state. Captures reversion-to-mean trades inside Bollinger bands.

Trigger rule +1 enter on close <= lower band, exit on close >= middle. -1 enter on close >= upper, exit on close <= middle.

Parameters period=20, std=2

For MSFT Active short mean-reversion held — price tagged the upper band, exits at the midline.

What it detects Fires on the bar where the close returns inside the bands after the prior close was outside. Long reentry from below the lower band, short reentry from above the upper band.

Trigger rule +1 when prior close < lower band and current close inside; -1 when prior close > upper band and current close inside.

Parameters period=20, std=2

For MSFT Price closed back inside the bands from above — short-term reversion-short signal.