Software Play Programmed for Huge Run

11/07/2002 12:00 am EST

Focus: STOCKS

A bullish technical pattern is shaping up on this software stock, and the expected upside target is over $60 above current levels. 

 

By Zev Spiro 

The chart for Microstrategy, Inc. (MSTR) is showing that a macro bullish continuation, inverse head-and-shoulders pattern began developing in 2007. The pattern triggered with a breakaway gap on January 26, which stemmed from the 2010 4Q results.

 

The minimum expected price objective of the pattern is $182, obtained by measuring the height of the pattern and expanding higher by the same distance from the trigger point.

[CHART 1 HERE]

After the macro pattern triggered, the price climbed steadily until a recent consolidation, which formed a bull flag pattern. Last week's breakout of the bull flag pattern provides a current buy-entry opportunity. 

[CHART 2 HERE]

Waiting for a pullback to the breakout level around $120 would have less risk, although it may not pull back to that level.

Target: $182 is the minimum expected macro objective

Protective stop: Confirmed move below the bottom of the flag, which is at $114.30

By Zev Spiro

If you have any questions or comments, please e-mail me at zevspiro@oripsllc.com with the subject line “moneyshow.”

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