MSTR Sees Short Interest Decline Amid Mixed Technical Indicators

Recent data shows that the short interest on Michael Saylor‘s Strategy Inc. MSTR has decreased, suggesting improved investor confidence. However, a mixed array of technical indicators indicates potential vulnerabilities for the stock.

Decrease in Short Interest

The short interest on Strategy’s stock (formerly MicroStrategy) has dropped from 24.01 million to 22.92 million shares in the latest reporting period. As of the settlement date on February 14, approximately 9.54% of the company’s publicly available shares were shorted, marking a positive shift in investor sentiment.

Nasdaq reports that this represents a 4.53% reduction from the previous settlement date of January 31.

Additionally, the average daily trading volume increased from 18.10 million to 12.45 million shares. This increase implies that short sellers would need about 1.84 days to cover their positions without causing significant price fluctuations.

High short interest typically reflects bearish sentiment; however, a decline tends to indicate rising confidence. Thus, the 4.53% decrease is viewed positively.

Technical Analysis Overview

Despite the drop in short interest, the technical indicators for the stock present a mixed view. As of Wednesday, the stock closed at $308.55, well above its 200-day moving average of $234.93, indicating a strong long-term uptrend. It also surpassed its eight- and 20-day moving averages, suggesting short-term bullishness.

Conversely, the stock remains below its 50-day moving average of $327.32, which may signal potential intermediate-term weakness, as noted by Benzinga Pro.

The relative strength index (RSI) stands at 50.95, indicating a neutral position. Meanwhile, a negative MACD of -15.84 points to bearish momentum.

This dynamic suggests that while long-term trends appear favorable, recent momentum is not as promising.

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Price Movement: This past Wednesday, the Bitcoin BTC/USD treasury company, MSTR, experienced a rise of 12.14%, outperforming the gains of the Invesco QQQ Trust, Series 1 QQQ, which rose by 1.30%. In premarket trading on Thursday, MSTR showed a slight decline of 1.22%, while QQQ fell by 1.25%.

Currently, the stock is 2.85% higher year to date and boasts an impressive increase of 147.59% over the past year.

Benzinga follows 14 analysts who collectively forecast an average price target of $494.93 for the stock, corresponding to a “buy” rating. Estimates vary significantly, ranging from $140 to $690. Recent assessments from Barclays, Keefe, Bruyette & Woods, and Maxim Group average at $493.67, suggesting an upside potential of 61.29%.

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