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MicroStrategy shares could remain in focus on Tuesday after surging 13% to a new record high on news that the software analytics company had bought another $4.6 billion worth of bitcoin.
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Gains in the stock have accelerated since breaking above a rectangular formation, with share turnover last week registering the highest level since its 1998 IPO.
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A bar pattern, which moves the stock’s trend up from October 2023 to March this year from the lower trendline of the rectangle formation, projects an upside bullish target of around $525.
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Investors should pay attention to key support levels on the MicroStrategy chart around $180 and $115.
MicroStrategy (MSTR) shares could remain in focus on Tuesday after surging to a new all-time high following news that the software analytics company had purchased another $4.6 billion worth of Bitcoin (BTC).
The company bought 51,780 bitcoins for about $4.6 billion in cash, at an average price of about $88,627 per bitcoin, bringing its total supply in the pioneer cryptocurrency to 331,200 BTC, according to a U.S. Securities and Exchange Commission (SEC) filing.
MicroStrategy, whose BTC holdings are around $30 billion at current prices, began acquiring Bitcoin in August 2020 to hedge against inflation and diversify its operating cash. Shares of MicroStrategy have risen nearly sixfold since the beginning of the year through Monday’s close, significantly surpassing Bitcoin’s year-to-date (YTD) return of approximately 115%.
The company’s shares rose 13% on Monday to close at $384.79.
Below we provide an overview of the technical features of MicroStrategy’s weekly chart and point out the key price levels to pay attention to.
Shares of MicroStrategy have remained in a steady uptrend since the 50-week moving average (MA) crossed above the 200-week MA in late January, forming a bullish golden cross signal.
More recently, gains have accelerated after the stock broke above a rectangle formation last month. Importantly, robust trading volumes have supported the rise, with shares last week posting their highest turnover since MicroStrategy went public in 1998.
The relative strength index (RSI) confirms bullish price momentum with a reading above the 80 threshold, but also signals overbought conditions that could lead to retracements in the near term.
Let’s apply technical analysis to MicroStrategy’s chart to project an upside price target and identify key support levels.
Investors can project an upside price target using a bar pattern, a charting technique that analyzes past trends to predict potential future moves.
