Microstrategy Plunges 8.77% Amid Heavy Selling Pressure Testing Key 365 Support

Microstrategy (MSTR) declined 8.77% in the most recent session to close at 366.63, accompanied by significantly elevated trading volume, indicating strong selling pressure. This sets the context for a technical analysis incorporating multiple indicators over the past year of data.
Candlestick Theory
Recent candlesticks reveal bearish momentum dominance. The August 1st session formed a long red (bearish) candle closing near its low after three indecisive candles (small real bodies), suggesting rejection of higher prices near 400-410. A key support level emerges near $365, corresponding to the day's low and prior consolidation lows observed in late June. Resistance is clearly established around $415-$425, evidenced by repeated price rejections on July 29-30, July 22-23, and earlier. The pattern suggests a test of the $365 support is underway; a decisive break could signal further downside.
Moving Average Theory
The stock's positioning relative to key moving averages highlights a deteriorating intermediate trend. The price is currently trading below both the 50-day and 100-day moving averages (approximating $380 and $350 respectively, based on the data). However, it remains above the rising 200-day moving average (estimated near $320), reflecting a persistent long-term uptrend despite recent weakness. The breach below the 50-day MA and the potential test of the 100-day MA signals weakening near-term momentum. Confluence occurs as the $365 support level aligns closely with the rising 100-day MA.
MACD & KDJ Indicators
The MACD line appears to have crossed below its signal line around the July 29th-30th timeframe, generating a sell signal that was confirmed by subsequent price weakness. The histogram has been trending negative, supporting bearish momentum. Concurrently, the KDJ oscillator (particularly the %K and %D lines) likely entered overbought territory (above 80) during the late-July rally towards $410-$415 before curling downwards and crossing below 80. This KDJ sell signal converging with the MACD bearish crossover provided timely warning of the current decline. KDJ levels are now falling but not yet near oversold, suggesting room for further downside momentum.
Bollinger Bands
Volatility expanded significantly during the August 1st sell-off, evident in the widening of the Bollinger Bands. The price closed near the lower band, indicating oversold conditions on a volatility-adjusted basis, but not necessarily implying an immediate reversal. Prior periods of price touching the lower band (late June) did result in bounces, making the current test notable. However, the sharp expansion itself often signals continuation of the momentum (downwards) in the very short term. A failure to bounce significantly off the lower band increases the likelihood of price consolidation or further downside near-term.
Volume-Price Relationship
The bearish price action on August 1st was validated by exceptionally high trading volume (21.8M shares vs. a ~15M average estimated from the past year), indicating strong conviction behind the sell-off. This surge contrasts with the lower volume observed during the preceding week's attempted rallies near $400-$410, which signaled lackluster buying interest. The high-volume breakdown strengthens the significance of the $365-$370 support zone; heavy volume on any reversal attempt would be needed to validate its strength.
Relative Strength Index (RSI)
Based on the 14-day formula, the RSI likely peaked near or just above 70 during the July 22nd-23rd period as prices approached $426-$427, marking an overbought condition. It has since declined steadily. While the sharp drop on high volume likely pushed the RSI further down, a value around 43 (estimated) suggests the stock is currently in neutral territory, avoiding oversold (<30) conditions. This indicates there could be room for further downside before the market deems the stock technically oversold based on this momentum indicator. It serves as a warning against anticipating an imminent, sharp rebound solely based on RSI oversold thresholds.
Fibonacci Retracement
Using the significant trough near $114 on September 9, 2024, and the peak near $1,600 in early January 2025, key Fibonacci retracement levels are established. The 38.2% retracement level falls at approximately $365, providing strong confluence with the critical support level identified by price action and the 100-day MA. This enhances the technical significance of the $365-$370 zone. A decisive close below this level would open the path towards the next significant Fibonacci support at the 50% retracement level near $315. The August 1st low and close precisely at the 38.2% level highlight its current importance.
Confluence & Divergence
Significant confluence exists around the $365-$370 support level, reinforced by the 38.2% Fibonacci retracement, the rising 100-day moving average, and historical price action lows. This area represents a critical battle line between buyers and sellers. Bearish indicator convergence is also evident: the MACD and KDJ generated synchronous sell signals in late July, confirmed by the high-volume breakdown. A minor divergence was observed earlier in July where price made marginal new highs above $426 but both MACD and RSI likely made lower highs, hinting at weakening upside momentum before the breakdown. The lack of an oversold RSI reading currently contrasts with the price trading at the Bollinger Lower Band; this divergence suggests that while volatile, the downside momentum may not yet be exhausted purely on these measures.