MicroStrategy (MSTR) shares rose in premarket trading Monday after Bitcoin (BTCUSD) set a new 澳洲幸运5官方开奖结果体彩网:record high above $106,000 and the company's stock secured inclusion in the 澳洲幸运5官方开奖结果体彩网:Nasdaq 100 index.

The Bitcoin proxy, which began purchasing the 澳洲幸运5官方开奖结果体彩网:legacy cryptocurrency 🔯in August 2020 to diversify its corporate assets, has seen its shares surge more than six-fold since the start of the year through Friday’s close as Bitcoin's price continues to make new highs.

Sentiment may also receive a boost after the Nasdaq announced late on Friday that the company’s stock will join the Nasdaq 100, meaning large index-tracking 澳洲幸运5官方开奖结果体彩网:exchange-traded funds (ETFs), such as the Invesco QQQ Trust (QQQ), will become automatic buyers of the stock.

The stock was up nearly 4% at $424 in recent pre-market tra𓂃ding.

Below, we take a closer look at MicroStrategy’s chart and use 澳洲幸运5官方开奖结果体彩网:technical analysis to identify important price levels that investꦆors may b𓃲e watching.

Descending Triangle Takes Shape

Since a 澳洲幸运5官方开奖结果体彩网:bearish engulfing pattern marked a record high in MicroStrategy shares last month, they have consolidated within a 澳洲幸运5官方开奖结果体彩网:descending triangle, a chart pattern that often signals a move in the direction of a breakout or 澳洲幸运5官方开奖结果体彩网:breakdown.

Meanwhile, the 澳洲幸运5官方开奖结果体彩网:relative strength index (RSI) has retreated below overbought levels throughout the stock’s latest consolidation phase, though it has carved out an 澳洲幸运5官方开奖结果体彩网:inverse head and shoulders-like pattern, potentially pointing to a local🐻 bottom in the indicator.

Let’s turn to MicroStrategy’s chart to forecast a potential breakout target worth watching and also identify several important 澳洲幸运5官方开奖结果体彩网:support levels to monitor upon a possible breakdown.

Breakout Target to Watch

Investors can forecast a potential breakout target using the bars pat♑tern tool, a technique that analyzes prior trends to predict future price moves. 

To apply the tool to MicroStrategy’s chart, we extract the recent trend higher that preceded the descending triangle and reposition it from the pattern’s upper 澳洲幸运5官方开奖结果体彩网:trendline, forecasting that an upside 澳洲幸运5官方开奖结果体彩网:continuation move may play out in the stock. This projects a target of around $800, nearly double Friday’s $408.67 closing price, an area where investors could look to 澳洲幸运5官方开奖结果体彩网:take profits.

Breakdown Support Levels to Monitor

Upon a breakdown from the descending triangle, investors should initially monitor the $268 level. This location, currently just below the 澳洲幸运5官方开奖结果体彩网:50-day moving average (MA), could encounter support around the October 澳洲幸运5官方开奖结果体彩网:swing high.

A close below this level could see the shares fall to around $227, a region on the chart where investors may seek 澳洲幸运5官方开奖结果体彩网:entry points near the mid-October peak and early-November trough.

Finally, MicroStrategy bulls’ inability to defend this area opens the door to a retest of lower support at the $180 level. Investors could look for buying opportunities in this location near the 澳洲幸运5官方开奖结果体彩网:200-day MA and a multi-month 澳洲幸运5官方开奖结果体彩网:horizontal line that connects a range of comparable 澳洲幸运5官方开奖结果体彩网:price action between March and October.

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