MSTR Surges 8.5% Pre-Market After Earnings Shock

Why is MSTR stock dropping today? Contradictory signals in context

Strategy (Nasdaq: MSTR) stock news hit the headlines after a volatile pre-market session saw the stock open with a 8.5% gain on the back of a large break from recent ranges. That said, the context is confusing: The stock is still in a multi-month downtrend and has only just broken down from a key support zone after a fourth-quarter earnings report revealed a $12.4 billion net loss. Still, the move shows a sharp reversal in sentiment—driven in part by Bitcoin price movements and the broader market backdrop.

The Nasdaq and S&P 500 are both seeing modest gains in pre-market futures, with the Nasdaq up 0.86% and the S&P up 0.69%. That hints at a generally positive risk-on environment. But MSTR’s move is sharper than the broader market, which suggests the catalyst is more specific. To put numbers on it, MSTR is trading at $116.09—up from $106.99—on a breakout that appears to be driven by mixed signals: a loss event, a sharp Bitcoin drop, and a weak technical structure.

MSTR stock news: Pre-market surge after earnings shock

The key catalyst was the earnings report released earlier this week. The company posted a $12.4 billion loss, largely due to the declining fair value of its Bitcoin holdings. That’s a hard event—something investors should take seriously. However, the stock’s reaction is more complex. In practice, MSTR is not only reacting to the earnings miss but also to the recent Bitcoin weakness. Analysts have downgraded price targets on the stock, and the Bitcoin price is currently below $63,000, which has further pressured the stock’s intrinsic value.

On the flip side, the stock’s surge in pre-market trading suggests that some traders are betting on a short-term bounce. In fairness, the move is largely a breakout from a multi-month downtrend, which often triggers countertrend rallies. That said, the RSI at 19.48 and a 20-day moving average at $158.45 suggest the bearish trend is still intact. In other words, this is a short-term bounce—not a reversal.

MSTR support and resistance levels to watch

Looking at the technical picture, MSTR is in a strong downtrend. The 20-day moving average is below the 50-day MA, and the RSI is in oversold territory. The stock’s breakout today is toward the 116.0 level, which is both a key support and resistance. That’s a tight zone—so the next few hours will be critical. At the end of the day, if the stock can hold above $116.0, the bounce could continue. If it breaks back below, the downtrend will likely dominate.

The 1.01x ATR suggests that a $105.96 level is a potential target on the downside if the reversal fails. Crucially, the volume has spiked to 1.47x its 20-day average, which shows real participation but not yet conclusive confirmation. Put differently, this is a high-interest trade with a fragile structure. The bottom line: traders should watch the $116.0 level closely for the next step in this volatile market.