Stock Of The Day: Is This The Bottom For Strategy?

Strategy Inc (NASDAQ:MSTR) shares, since July, have lost more than 80% of their value. But this long downtrend may have finally ended. This is why Michael Saylor‘s company is our Stock of the Day.

One of the most important things for a trader to understand about the financial markets is that some price levels are more important than others. Sometimes the reason for a level's importance isn't clear, but sometimes it is.

In May 2024 Strategy was trading lower. For some reason, when the shares reached around $105, buyers entered the market. There were so many of these buyers that the move lower ended, and a reversal followed.

When this happened, many of the people who sold for around $105 came to regret their decision to sell. Some of them decided to buy their shares back if they could get them for the same prices they sold them for.

In August 2024, when Strategy dropped back to $105, these unhappy traders placed buy orders. There were so many of these orders that it resulted in support forming.

A rally followed this, and the same dynamic occurred again. Some who sold experienced remorse and decided that if they could eventually do so, they would buy their shares back at their selling price.

When the shares finally dropped back to this price yesterday, these remorseful sellers placed buy orders. The large number of these buy orders formed support at the level again.

If some of these buyers become impatient, they may end up pushing the price higher. This happens if they start bidding higher than others who wish to sell.

This could result in the stock going into an uptrend. This is what occurred with Strategy the last two times it dropped to this important level.

It may be about to happen again.