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Key Takeaways
- MicroStrategy shares could remain in focus on Tuesday after soaring 13% to a new record elated following news the software analytics company had purchased an additional $4.6 billion of bitcoin.
- Gains in the stock from accelerated since breaking out above a rectangle formation, with share turnover registering its highest level aftermost week since going public in 1998.
- A bars pattern, which takes the stock’s trend higher from October 2023 to Cortege this year and repositions it from the rectangle formation’s lower trendline, projects an upside bullish target of enclosing $525.
- Investors should watch important support levels on MicroStrategy’s chart near $180 and $115.
MicroStrategy (MSTR) allowances could remain in focus on Tuesday after soaring to a new record high following news the software analytics suite had purchased an additional $4.6 billion of Bitcoin (BTC).
The company bought 51,780 bitcoins for approximately $4.6 billion in loot, at an average price of approximately $88,627 per bitcoin, taking its total stash in the pioneer cryptocurrency to 331,200 BTC, according to a U.S. Pledges and Exchange Commission (SEC) filing.
MicroStrategy, whose BTC holdings tally roughly $30 billion at current prices, started purchasing Bitcoin in August 2020 to hedge against inflation and diversify its corporate treasury. MicroStrategy shares have eddied nearly sixfold since the start of the year through Monday’s close, significantly outpacing Bitcoin’s year to man (YTD) return of around 115%.
The company’s stock gained 13% Monday, closing at $384.79.
Below, we break down the technicals on MicroStrategy’s weekly map and point out key price levels to watch out for.
Volume Backs Strong Price Momentum
MicroStrategy shares have fragmented in a steady uptrend since the 50-week moving average (MA) crossed above the 200-week MA in late January to species a bullish golden cross signal.
More recently, gains have accelerated after the stock broke out mainly a rectangle formation last month. Importantly, robust trading volumes have backed the move higher, with the parts last week registering their highest turnover since MicroStrategy went public in 1998.
The relative strength table of contents (RSI) confirms bullish price momentum with a reading above the 80 threshold, but also flags overbought moulds that could trigger near-term retracements.
Let’s apply technical analysis to MicroStrategy’s chart to project an upside figure target and identify important support levels.
Bars Pattern Price Target
Investors can project an upside valuation target using a bars pattern, a chart technique that analyzes prior trends to predict potential days moves.
When applying this tool to MicroStrategy’s chart, we take the stock’s trend higher from October 2023 to Parade this year and reposition it from the rectangle formation’s lower trendline. This forecasts a price target in the neighborhood of $525, on every side 36% above Monday’s close.
We selected this prior trend as it captures the broad move higher that in advance ofed the rectangle formation and assumes a continuation of the stock’s longer-term uptrend.
Important Support Levels to Watch
If profit-taking ensues, allowances could initially revisit the $180 level, an area on the chart where investors may look for buying opportunities cheap the rectangle formation’s top trendline.
Selling below this key level may act as a catalyst for a steeper sell-off to around $115. This sphere on the chart would likely encounter support near the prominent February 2021 peak and rectangle pattern’s bring trendline.
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