Strategy, Inc (MSTR) Price Forecast: Breakdown Below Key Averages Signals More Downside

Bearish Breakdown Below Long-Term Trend Support

Sellers continue to control the stock of Strategy, Inc. (MSTR) and it is poised to move lower. MSTR broke key trend support this week, falling below both the 200-week and 50-month moving averages. Bearish momentum is evident as MSTR continues to trade near the lows of the week, at $104.17. Despite reaching the most oversold level on the Relative Strength Index (RSI) since March 2020, lower targets look likely to be tested before the bearish correction completes.

Resistance Levels Likely to Cap Countertrend Rallies

Although a bounce may occur in the near-term, the larger picture is bearish. Rallies can be anticipated to hit resistance and turn back down until there is some sign of a potential bottom. The 200-week average at $146.35 is key potential resistance, along with this week’s lower high of $147.88. Above there, the 10-week average marks dynamic resistance. It is now at $159 and falling. It is approaching a bearish crossover below the 200-week average, which would place additional resistance beneath that long-term level.

Next Support Zone and Broader Downside Risk

The next lower support area looks to be around the lows of a short consolidation basing pattern from last year at $102.40 to $101.00. That price zone is also indicated by the highs in 2021. However, lower targets and a failure of support at the long-term 200-week average suggest that the bearish correction may have more downside to go.

Deeper Pullback Targets and Fibonacci Levels

If the low of the next potential support range is broken, then MSTR could fall to around $80.00 rather quickly. That is where resistance was seen for much of 2021. That area can be monitored alongside the 88.6% Fibonacci retracement of the prior advance, begun from the 2022 lows, at $73.65, for signs of support. In general, if the 88.6% retracement fails, a bullish recovery becomes more distant.

Measured Move Projections Highlight Extended Downside Risk

Further down is the completion of a projected 127.2% measured move at $61.00, as seen in the falling ABCD pattern on the chart. The first target for the pattern is a 100% projection of $145.73. That is where the second leg down (CD) matched the decline in price seen in the first leg off the November peak of $543.00 (AB). That pivot level seemed to be recognized by the market recently as it aligned with the 200-day average. There was ten weeks of sideways price action that tested support before MSTR broke below it this week.