Since soaring to their highest level since November 2021 amid a rise in Bitcoin (BTC), shares of MicroStrategy Inc (NASDAQ:MSTR) have quickly fallen from grace. The security is already down nearly 28% in 2024, yesterday touching a more than two-month low after BTC slipped below the $40,000 level. However, MSTR was last seen 1.6% higher today at $457.56, and its aforementioned pullback has placed it near a historically bullish trendline.
More specifically, the crypto-adjacent stock just ran into its 120-day moving average, after trading above it since late-October. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, five similar signals occurred during the past three years. MSTR was higher after 60%, averaging a one-month gain of 13.1%. A similar move from its current perch would put the security at around $517.50.
MicroStrategy stock's Relative Strength Index (RSI) of 12.2 sits deep in "oversold" territory, indicating a short-term bounce could be in the cards. Further, the 2.88 million shares sold short account for 21.2% of the security's total available float.
Shifting sentiment in the options pits could also yield tailwinds. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OM X PHLX (PHLX), MSTR's 10-day put/call ratio of 1.60 ranks in the 82nd percentile of annual readings. This means options traders have preferred puts over calls during the last two weeks.
Those looking to bet on the change in tune can buy premium at a reasonable price. This is per MicroStrategy stock's Schaeffer's Volatility Index (SVI) of 67% that stands in the relatively low 29th percentile of its annual range, as well, implying that options players are pricing in lower-than-usual volatility expectations at the moment.
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