afurs1

MSTR Can Double Your Gains

Long
afurs1 Updated   
BATS:MSTR   MicroStrategy
Microstrategy has been the foremost Bitcoin related stock outside of the miners or ETFs.

Ive noticed that MSTR tends to be significantly better correlated than some of the other BTC related plays, however you must be careful as it acts as a leverage play as BTC moves. You will generally see MSTR move 2x - 3x the percentage move of Bitcoin.

Looking through the chart, we can clearly see a bullish trend on the hourly time frame, however we may have potentially reached a physiological limit at $2k as price rallies before a sharp rejection.

I would be welcome to a nice pullback towards the lower level range around $1600 where MSTR left a large gap prior to pumping. This would be a strong buy zone if Bitcoin continues to rally to new all time highs.

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Would love to see this scenario play out

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Here is what I am watching now

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The bigger picture

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Careful of the trendline, clearly MSTR is very sensative now. BTC is rallying at highs while we are struggling to hold some levels

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Level to level

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Waiting to see what happens at VWAP.

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Rejection at the VWAP and 21 ema at the moment. This big support zone will be critical and likely act as a magnet. I will place some limit buys at 1600, 1550, and 1500.

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Will be patiently waiting for this one moving into next week

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Coming into our range

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Starting to form divergences

Trade active
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Lets see if we bounce from this zone. Orders filled at 1600

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MSTR opening up at $1480. All orders having been filled.

If we close a daily below $1400, and BTC has a larger correction I will exit the trade and look for better entries.
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So far moving according to plan

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Now that the stock is starting to move, managing my risk will be the most important part of the trade.

I am moving my stop up to $1580 (daily candle close).

As long as BTC is bullish, my bias remains long and chill unless the trade is stopped out.

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Additionally, to add confluence as to why my bias remains bullish are the following indicators:

1. Nice break of the 21 EMA on the 45 min candle. In the past, breaking above this trend line has resulted in bullish price action.

2. We have unfinished highs at the top of the range. Generally, you want to see a wick above a previous high before a reversal. This would indicate trapped traders at the top. We have not quite seen a wick there yet.

3. Finished lows at the bottom of the pullback, below the gap before we had the last pump. Notice how price action wicked below the low before reversing, indicating trapped shorts at the bottom of the move.

4. Longer term trend is still clearly bullish. Price is making higher highs, and higher lows.

Resistance levels to the upside are marked on the chart.

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Nice gap up in the morning, holding our support. Potential to fill the gap below where buyers may step in again.

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Watching the gaps

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Gap Filled as expected. Market is in a sensitive spot at the moment, but we also have a potential bear trap setup for tomorrow.

I will be watching these critical levels just below $1600.

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Exactly as per last nights plan, we are seeing the bear trap play out. Key resistance to hold above us will determine if we are going higher, or if we will get smacked back down.

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Resistance level at $1650 (21 EMA)
$1700 S/R flip

Looking for 15 Min / 30 min close to determine direction.

Daily candle close today is quite important.
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First resistance hit, pulled back to previous day close and starting to bounce.

Market giving another trade idea, breaking the trend line would be a great sign of strength.

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Trade stopped out! Looking for new entries
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Currently getting the same bull signal on the 45min that was last present when mstr traded at $680.

Currently trading within Value area, after bouncing from the VAL into the Range POC before a rejection.

It would be critical to find support here, which may potentially indicate a large move ahead.

I would be willing to build a position at these prices, break below $1370 would invalidate the idea.

Regardless, I do feel like Bitcoin is still quite bullish and its tough to fight the trend. These swings are just part of the nature of such a volatile asset, but the longer term picture is still bullish on the charts.

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zoomed out

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