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Software stock MicroStrategy (MSTR) (which now does business as “Strategy”) is on track for its third-straight gain, up 0.4% to trade at $336.91 at last glance. The equity, which just surpassed 500,000 in Bitcoin (BTC) holdings, continues to gather attention amongst investors as a potential crypto play amid President Trump’s administration.
On the charts, MicroStrategy stock has fallen sharply from its Nov. 21 record high of $543, but remains up 81.3% year-over-year. The stock could extend its short-term bounce, too, as a recent V-shaped rally pushed above several moving averages– including two that have yielded bullish returns in the past.
Specifically, MSTR has -- after more than 21 days below the trendlines -- finally cleared its 50- and 80-day moving averages on a closing basis. Over the past three years, the stock has seen four similar breakthroughs over each respective trendline. The equity was higher one month later after 75% of its 50-day signals with an average 26.5% gain, and 50% of its 80-day signals with an average 8.8% gain.
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Meanwhile, short interest is up 12% over the past two weeks, though the stock has been steadily rising during this time, now representing 10.7% of the stock’s available float. Should shorts begin to cover their bets, it could provide MSTR with further tailwinds.
When weighing in on MicroStrategy’s net move, options look like a good way to go. The stock’s Schaeffer’s Volatility Index (SVI) of 78% ranks in the 8th percentile of its annual range, meaning options traders are pricing in low volatility expectations.
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