MicroStrategy Shares Rise as Bitcoin, S&P 500 Rise Higher: What to Watch

MicroStrategy Incorporated MSTR was sky high approx. 16% higher Tuesday after spending Monday’s trading consolidating a gap up that occurred due to Bitcoin BTC/USD showing strength before the stock market opening.

Bitcoin rose 8% on Monday, and during Tuesday’s 24-hour trading session, the crypto began consolidating with an inside bar pattern before breaking out of Monday’s mother bar.

The price action boosted MicroStrategy because the software and cloud services company has 129,699 Bitcoins, according to Bitcoin Treasury data. MicroStrategy’s stake in the crypto is valued at around $3.01 billion.

MicroStrategy’s movement is also linked to the S&P 500, which also experienced bullish price action. The ETF traded up over 2% at the time of writing and also broke out of an inside bar pattern to surpass Monday’s intraday high.

The bullish action in MicroStrategy may also be tied to the continuation of an uptrend, which the stock reversed on June 13 after hitting a low of $143.90.

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The micro strategy diagram: MicroStrategy’s last uptrend low was printed on July 13 at $182.45, and the last confirmed higher high was formed at $236.28 on July 8. On Tuesday, MicroStrategy surpassed the July 8 high-of-the-day as well as Monday’s high-of-the-day, which confirmed that the uptrend is still intact.

• Bullish traders who are not already in a position may choose to wait for MicroStrategy to print their next low before entering a position. A higher low can often be identified by looking for a reversal candlestick, such as a doji or hammer candlestick, to print above the last higher low.
• A pullback is likely to come in the next few days as MicroStrategy’s relative strength index measures around 65%. When a stock’s RSI reaches or approaches the 70% level it is overbought, which can be a sell signal for technical traders.
• MicroStrategy has two gaps on the chart, with the closest gap above between $272.88 and $282.55 and the lower gap falling between $213.98 and $225.63. Gaps on charts fill about 90% of the time, making it likely that the stock will trade into either gap in the future.
• The stock has resistance above at $305.60 and $347.50 and support below at $252.02 and $209.11.

See also: Why crypto stocks are trading higher