Software Play Programmed for Huge Run
03/08/2011 7:01 am EST
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.
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.
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 SpiroIf you have any questions or comments, please e-mail me at email@example.com with the subject line "moneyshow."