Microstrategy Plunges 8.77% As Technical Indicators Signal Strong Bearish Momentum

In the latest trading session, Microstrategy (MSTR) declined by 8.77% to close at $366.63. This technical analysis employs multiple frameworks to evaluate the stock's current position and potential future movements.
Candlestick Theory
The most recent session formed a long bearish candlestick, closing near its low of $365.7 after testing resistance near $392.64, indicating strong selling pressure. This follows a doji pattern on 2025-07-31 (high: $410.81, low: $397.08), reflecting indecision before the breakdown. Key support emerges at $365.7 (intraday low), aligning with the 2025-06-20 low of $365.11. Resistance is established at $392.64 (recent high) and the psychological $400 level. A close below $365 may trigger further downside, while reclaiming $392.64 could signal stabilization.
Moving Average Theory
The 50-day moving average (approximately $405) crossed below the 100-day MA ($395) recently, signaling deteriorating medium-term momentum. The current price ($366.63) sits below both, confirming short-term bearishness. However, it remains above the rising 200-day MA (~$355), which provides critical long-term support. The convergence of the 50/100/200-day MAs between $355–$405 suggests a pivotal zone; sustained trading below the 200-day MA would indicate a structural downtrend.
MACD & KDJ Indicators
MACD (12,26,9) shows a bearish crossover below its signal line, with the histogram expanding negatively, confirming accelerating downward momentum. KDJ oscillators reflect oversold conditions, with the K-line near 20 and D-line near 25. However, both lack bullish divergence, as they align with lower price lows. While oversold KDJ readings warn of exhaustion, MACD’s momentum suggests potential for further downside before a reversal attempt.
Bollinger Bands
Bollinger Bands (20-day) contracted notably in late July, indicating reduced volatility before the breakdown. The price has plunged below the lower band ($375), typically signaling oversold conditions. Historically, such breaches led to mean-reversion bounces (e.g., 2025-06-23). However, the band expansion implies volatility resurgence; a sustained break below $365 could extend the downtrend, while a recovery above $380 may precede consolidation.
Volume-Price Relationship
Volume surged to 21.7 million shares during the sell-off, doubling the 10-day average, validating the bearish breakout. Recent distribution patterns emerged as volume expanded on down days (e.g., 2025-07-18: -6.23% on 19.1M shares) but contracted on rebounds. The capitulation-level volume on the latest decline suggests seller exhaustion, potentially creating conditions for a technical bounce if accompanied by accumulation.
Relative Strength Index (RSI)
The 14-day RSI (~28) entered oversold territory, below the 30 threshold. This reflects acute downside momentum but remains a lagging warning rather than a reversal signal. Notably, RSI did not form bullish divergence during the July decline, as it made lower lows alongside price. Traders should monitor for RSI stabilization above 30, which could precede short-term relief.
Fibonacci Retracement
Using the swing low of $318.67 (2025-02-19) and high of $455.9 (2025-07-16), key retracement levels are: 23.6% ($423.5), 38.2% ($403.6), 50% ($387.3), and 61.8% ($370.99). The price tested the 61.8% level ($370.99) intraday before closing marginally below it. This zone now represents critical support, reinforced by the 200-day MA ($355). Holding above $370 may catalyze a rebound toward $387.3, while failure opens downside to $355.