MSTR is currently trading around $384, consolidating just under a significant historical resistance near $432, the neckline of a potential cup and handle formation. Price action has respected a rising wedge channel since mid-April, making higher highs and higher lows with relatively muted volume – a classic consolidation before a breakout... or breakdown.
The Cup and Handle – Brewing or Breaking?
Cup Formation: The cup ranges from the November 2023 high down to the January 2024 lows and back up, completing the round base at ~$432.
Handle Formation: Price has been forming a descending handle within the rising wedge, staying above key moving averages.
Breakout Target (Cup & Handle):
Cup depth: ~$432 - ~$290 = $142
If confirmed breakout occurs above $432, measured move takes us to ~$574
Bullish Validation:
Close above $432 on strong volume confirms breakout.
Look for volume spike + strong Heikin Ashi candles with little/no wicks below body.
Momentum indicators (MACD crossover + RSI breaking 60+) would further confirm.
Bearish Breakdown Scenario:
A confirmed breakdown below $360 (channel support + BB midline) would shift momentum bearish.
$352 (100 EMA) is the next critical level — if this goes, the structure weakens significantly.
Watch for a test of $332, which aligns with both Bollinger Band support and a horizontal demand zone.
A full breakdown of the channel and cup handle structure could see price revisiting the base of the cup near $290–292, where the 233 SMA and major historical support converge.
Indicators:
MACD: Bullish crossover forming, histogram slightly positive. Needs stronger momentum to sustain rally.
RSI: Neutral zone (~52). Not overbought or oversold – room to move in either direction.
Volume: Volume is decreasing, typical before a big move. A spike will hint at direction.
Final Thoughts
MSTR is at a pivotal technical crossroads. The broader setup shows a cup and handle formation in progress, with the handle unfolding inside a well-defined ascending channel — a bullish structure that supports continuation if price holds key levels.
To confirm the cup and handle, bulls need to see a clean breakout and close above $432, preferably on increased volume. That would validate the pattern and open up a measured move target toward $574+.
Meanwhile, the ascending channel remains intact, guiding price higher with higher lows and highs. To maintain this structure, MSTR must hold support above $360–352. A sustained bounce off this zone would reinforce both the channel and the handle as part of the bullish setup.
However, if price breaks below $352 and especially closes below $332, it would invalidate the ascending channel and begin to threaten the cup’s base structure. A breakdown toward $290–292 would likely follow, where the entire pattern would need to be reassessed.
Until a breakout above $432 or a breakdown below $352–332 is confirmed, this remains a neutral “watch zone”. Swing traders should be cautious, but keep alerts set, a move in either direction could be powerful and directional.
The Cup and Handle – Brewing or Breaking?
Cup Formation: The cup ranges from the November 2023 high down to the January 2024 lows and back up, completing the round base at ~$432.
Handle Formation: Price has been forming a descending handle within the rising wedge, staying above key moving averages.
Breakout Target (Cup & Handle):
Cup depth: ~$432 - ~$290 = $142
If confirmed breakout occurs above $432, measured move takes us to ~$574
Bullish Validation:
Close above $432 on strong volume confirms breakout.
Look for volume spike + strong Heikin Ashi candles with little/no wicks below body.
Momentum indicators (MACD crossover + RSI breaking 60+) would further confirm.
Bearish Breakdown Scenario:
A confirmed breakdown below $360 (channel support + BB midline) would shift momentum bearish.
$352 (100 EMA) is the next critical level — if this goes, the structure weakens significantly.
Watch for a test of $332, which aligns with both Bollinger Band support and a horizontal demand zone.
A full breakdown of the channel and cup handle structure could see price revisiting the base of the cup near $290–292, where the 233 SMA and major historical support converge.
Indicators:
MACD: Bullish crossover forming, histogram slightly positive. Needs stronger momentum to sustain rally.
RSI: Neutral zone (~52). Not overbought or oversold – room to move in either direction.
Volume: Volume is decreasing, typical before a big move. A spike will hint at direction.
Final Thoughts
MSTR is at a pivotal technical crossroads. The broader setup shows a cup and handle formation in progress, with the handle unfolding inside a well-defined ascending channel — a bullish structure that supports continuation if price holds key levels.
To confirm the cup and handle, bulls need to see a clean breakout and close above $432, preferably on increased volume. That would validate the pattern and open up a measured move target toward $574+.
Meanwhile, the ascending channel remains intact, guiding price higher with higher lows and highs. To maintain this structure, MSTR must hold support above $360–352. A sustained bounce off this zone would reinforce both the channel and the handle as part of the bullish setup.
However, if price breaks below $352 and especially closes below $332, it would invalidate the ascending channel and begin to threaten the cup’s base structure. A breakdown toward $290–292 would likely follow, where the entire pattern would need to be reassessed.
Until a breakout above $432 or a breakdown below $352–332 is confirmed, this remains a neutral “watch zone”. Swing traders should be cautious, but keep alerts set, a move in either direction could be powerful and directional.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.