Now that earnings are out of the way (and at least an hour into the conference call), I’ve decided to go ahead & make MSTR (Strategy Inc) a new official swing trade idea on the long side, with the stock hitting the bottom of my final downside target zone (T3 zone) in the after-hours session… a well defined long-term support level & a full drop to the bottom of the support zone I’ve been targeting for months.
As with the recent short on silver, with the initial entry essentially at the all-time highs of the most powerful & parabolic bull run in the history of the metal, this one is every bit as much an extremely aggressive, counter-trend/catch-a-falling knife trade & as I said with the silver short; pass if it does not mesh with your risk-tolerance, trading style, objectives, and/or outlook on MSTR & Bitcoin.
MSTR daily 2 Feb 5th
MSTR offers an objective long entry here at the bottom of the final price target zone/support zone & will be added as an official long trade with a max stop (if targeting T3/final target) on a daily close below 88. That would provide for about a 14% loss, if stopped out, versus a profit potential of about 130% to my final & current preferred price target of the 234ish resistance level & intersecting 200-day moving averages. That’s an unusually favorable R/R of around 9.3:1, which helps to balance out the below-average change of success, due to the fact that there isn’t anything remotely close to a buy signal on either MSTR or Bitcoin at this time (both are in freefall but may be in the final stages of a near-term selling climax.
My best guess is this trade will either start to pan out almost immediately, with MSTR rallying off this support tomorrow or next week, or hit the suggested stop by then, if Bitcoin continues to fall to my next bear market target of 48,671. Due to the aggressive nature, high volatility & above-average gain/loss potential, the suggested beta-adjusted position size for this trade is 0.25-0.50.