A lesson in FOMO: MicroStrategy stock price continues to soar
MicroStrategy shares have skyrocketed recently. Here's what's driving the rally and why investors need to be cautious after recent gains.
Why is MicroStrategy's share price surging?
MicroStrategy's stock surged 15% on Wednesday to $495.98, continuing its meteoric rise as the company capitalises on its strategic investments and market positioning. The company has seen its shares skyrocket nearly 700% this year, significantly outperforming its peers and broader market indices.
This rally follows a series of high-profile moves to enhance its financial standing and expand its asset base, boosting its market capitalisation to $109.3 billion and securing its place as the 88th largest US public company.
Executive Chairman Michael Saylor credits the company’s bold strategies and innovative focus for revitalising its operations, transforming it into a market leader with substantial growth momentum.
Understanding the risks of parabolic price moves
The recent parabolic move in MicroStrategy's stock price presents both opportunities and significant risks for traders and investors. Historical data suggests that such rapid price increases often lead to increased volatility, as evidenced by the Average True Range indicator jumping from 1500 to 3500.
Investors considering opening an online trading account should carefully evaluate their risk tolerance, given the stock's current momentum.
A potential pullback to the November 13 high would represent a 26% decline from current levels, highlighting the importance of proper position sizing.
Technical analysis of MicroStrategy's share price
The stock's technical indicators show extremely overbought conditions, though momentum remains strongly bullish. Trading volumes have surged alongside the price increase, suggesting strong institutional participation in the rally. Resistance levels have been consistently broken to the upside, with previous resistance points becoming new support areas. However, the distance from major moving averages suggests the potential for mean reversion in the medium term.
MSTR daily chart
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on stock opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
