Can MicroStrategy's Stock Buck The Downtrend?

MicroStrategy Incorporated MSTR CEO Michael Saylor hosted a meeting between Tesla Inc TSLA CEO Elon Musk and a number of North American Bitcoin BTC/USD miners to discuss ways to improve the environmental impact of Bitcoin’s mining and transactions.

MicroStrategy, an enterprise analytics and mobile software company, had 92,079 Bitcoins on its balance sheet as of May 19. Saylor, through his enterprises, says he owns a total of 111,000 Bitcoins in total and has not sold any despite the recent sell-off.

MicroStrategy has also sold off quite heavily over the past four months, but could be in for a bullish reversal.

The MicroStrategy Chart: MicroStrategy’s stock has lost over 60% of its value since Feb. 9 when it made an all-time high of $1315. After the stock’s initial plummet between Feb. 10 and Feb. 23, MicroStrategy traded sideways into a symmetrical triangle before breaking bearish from it on May 10. After breaking bearish from the symmetrical triangle, MicroStrategy fell 28% before bouncing from the 200-day simple moving average (SMA) and a support zone at $264.51.

MicroStrategy’s stock is being pushed down by the eight-day exponential moving average (EMA) and the eight-day EMA is trending below the 21-day EMA, which is bearish. The 200-day SMA is pushing the stock up, however, and because MicroStrategy is trading above the 200-day SMA, overall sentiment in the stock remains bullish.

Bulls want to see MicroStrategy maintain the $464.51 level as support and pop up over the eight-day EMA. If the stock can regain the eight-day EMA as support, it has room to move up toward $521.31. A move over that level could see MicroStrategy trade up near the $565 level.

Bears want to see MicroStrategy’s stock lose support at $472 and fall below the 200-day SMA. A loss of that area would indicate overall sentiment had become bearish and the stock could see lower prices. If MicroStrategy fell below the $406 level it could fall toward $347.50 before bouncing.

MSTR Price Action: Shares of MicroStrategy were trading down 1% to $467.46 at publication time.