Watch These MicroStrategy Price Levels as Stock Jumps After Latest Bitcoin Purchase

MicroStrategy (MSTR) shares jumped more than 10% on Monday, adding to recent gains following the stock’s recent correction.

Shares in the company, which is the world’s largest corporate holder of bitcoin, received a boost after a regulatory filing on Monday revealed that the software firm had purchased an additional 6,911 bitcoins between March 17 and March 23, takings its holding to over 500,000 BTC. MicroStrategy’s accumulation of the digital currency, which began in 2020, has shown no signs of slowing.

Shares of MicroStrategy, which does business under the name Strategy, have gained 16% since the start of the year as of Monday’s close and have more than doubled over the past 12 months as investors turn to the stock as a leveraged Bitcoin bet. The stock rose 10.4% to $335.72 on Monday as the price of bitcoin moved higher.

Below, we break down the technicals on MicroStrategy’s chart and point out major price levels worth watching out for.

Buyers Emerge at 200-Day Moving Average

After retracing to the closely watched 200-day moving average, MicroStrategy shares traded sideways for several weeks before finding renewed buying interest.

More recently, the stock closed above the 50-day MA on Monday, potentially setting the stage for a continuation of the stock’s longer-term uptrend.

Meanwhile, the relative strength index (RSI) flashes a reading above 50 to signal bullish price momentum, but also sits below overbought levels, providing the stock with ample room to test higher prices.

Let’s apply technical analysis to identify major overhead areas on MicroStrategy’s chart that investors may be monitoring and also point out support levels worth watching during possible pullbacks in the stock.

Major Overhead Areas to Monitor

The first overhead area to eye sits around $383. The shares could run into selling pressure at this level near a series of peaks and troughs that formed on the chart between mid-November and late January.

Buying above this level could put the wheels in motion for a rally to the $543 area. Investors who accumulated shares during the stock’s retracement may look to lock in profits near the all-time high (ATH) set in November last year.

Investors can project an overhead target above the ATH by using the bars pattern tool. This works by extracting the stock’s trending move from September to November last year and repositioning it at the 200-day MA, the same indicator the prior move higher started from. This analysis forecasts a target of around $870 and indicates a new trend higher may last until late May if price action rhymes.

Key Support Levels Worth Watching

During pullbacks, investors should initially watch the $232 level, a location on the chart where the shares may encounter support near the early-November profit-taking low and recent troughs in February and March.

Finally, a more significant drop could see MicroStrategy shares revisit lower support around $180. Investors may seek buying opportunities at this level near a horizontal line that links multiple prominent peaks on the chart between March and July last year.

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As of the date this article was written, the author does not own any of the above securities.