MicroStrategy Plunges 8.7% to 328.4 as Bearish Signals Intensify

Strategy (MSTR) declined 8.70% in the most recent session, closing at 328.4 after testing support near 328.16. This sharp pullback follows heightened volatility observed over the past month, warranting a multi-indicator assessment of the stock’s technical posture.
Candlestick Theory
Recent price action shows a Bearish Engulfing pattern formed between October 6th (green candle, high 365.21) and October 7th (red candle, low 328.16), signaling potential near-term downside momentum. Key resistance now sits at 359.44 (recent swing high), while critical support clusters around 328.16 (intraday low) and 300.70 (September 25th trough). A sustained break below 328 would expose the psychological 300 level.
Moving Average Theory
The 50-day SMA (currently near 345) crossed below the 100-day SMA (near 358) in late September, confirming a bearish intermediate trend. The 200-day SMA (~372) maintains a downward slope, reinforcing the long-term downtrend. Recent price rejection at the 50-day SMA suggests this moving average now acts as dynamic resistance. Death Cross configuration (50<100<200) remains intact.
MACD & KDJ Indicators
MACD shows bearish momentum acceleration, with the histogram expanding negatively below both signal and zero lines. KDJ exhibits divergence: While price made a higher high on October 6th, the K-line peaked at a lower level on October 3rd, signaling weakening upside strength. Current readings (K:25, D:40, J:10) approach oversold territory but lack reversal confirmation.
Bollinger Bands
Volatility expansion occurred after a contraction phase in September, with price breaking below the lower band (332) on October 7th – typically indicating oversold conditions. The 20-day band width remains elevated, suggesting continued volatility. A reversion toward the midline (348) may occur if selling pressure abates.
Volume-Price Relationship
The 8.7% decline was accompanied by significantly above-average volume (19.5M shares vs 10-day avg 12.8M), validating bearish conviction. This distribution pattern contrasts with the rally from September 25th-October 2nd, where rising prices saw diminishing volume – a negative divergence that foreshadowed weakness.
Relative Strength Index (RSI)
RSI(14) plunged to 35 after the selloff, exiting overbought territory (>70 on September 28th) but not yet reaching oversold (<30) conditions. Bearish divergence was notable as RSI failed to exceed its August high while price tested 365, suggesting weakening momentum. RSI’s current position implies further downside potential before stabilization.
Fibonacci Retracement
Using the swing low of 292.36 (September 25th) and high of 365.21 (October 6th):
• 23.6% level at 348 held briefly on October 3rd before breaking
• 38.2% support at 335 failed during the recent selloff
• Next critical levels are 50% (328.78) and 61.8% (318.71)
The close near the 50% retracement suggests this level may offer temporary stabilization. A breakdown below 61.8% would signal continuation of the primary downtrend.
Confluence & Divergence Observations
Confluence of bearish signals appears at 345-355: Resistance from the 50-day SMA, Fibonacci 23.6% level, and Bollinger midband align to create a significant supply zone. Notable divergence occurred in early October when price neared 365 despite deteriorating MACD histogram and weakening RSI momentum – a warning subsequently validated. Volume confirmation of breakdown and KDJ/MACD bearish alignment suggest continued downward pressure, though oversold Bollinger and Fibonacci 50% support near 328 may trigger consolidation.