By Fadi Dawood
1/ MicroStrategy ($MSTR): Signs of Exhaustion?
2/ Gold Futures: Lower High in Play?
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1/
MicroStrategy ($MSTR): Signs of Exhaustion?
MicroStrategy ($MSTR) has experienced a powerful rally, surging to new highs, but recent price action suggests the stock might be showing signs of exhaustion.Â
MSTR remains firmly in an uptrend, trading well above its 200-day SMA (thick maroon line), which continues to rise. The 50-day SMA (orange) and 20-day SMA (blue) are also trending upward, providing shorter-term support. However, the recent pullback from the upper Bollinger Band indicates that momentum may be cooling off, at least temporarily.
The stock recently hit a high near $540 before retreating, leaving behind a series of volatile daily candles with long upper wicks. This pattern often signals hesitation or profit-taking among buyers. Prices are now consolidating near a support level between $370-$375. A break below this level could lead to further downside.
The recent surge in volume, particularly during the rally to $540, suggests heightened trading activity driven by both buyers and sellers. While strong volume is generally a positive sign, the accompanying pullback indicates that profit-taking is in play. If volume spikes on down days persist, it could signal distribution and further selling pressure.
2/
Gold Futures: Lower High in Play?Â
Gold Futures appear to have printed a lower high, signaling potential weakness in the recent rally. After a strong rebound from support levels, price action suggests that bullish momentum may be losing steam, with a rejection near prior highs.
The chart shows Gold Futures rallying above the 200-day SMA (thick maroon line) in early November, climbing back above the 20-day SMA (blue) and 50-day SMA (orange). However, the rally stalled creating a potential lower high. This failure to break into new highs suggests a shift in momentum and could be an early indication of a bearish trend reversal.
While Gold remains above the 200-day SMA, which continues to rise, the shorter-term moving averages are showing signs of flattening. The recent drop below the 20-day SMA ($2,675) reflects fading bullish momentum. A sustained move below the 50-day SMA ($2,678) would confirm the weakening trend and raise the likelihood of a deeper retracement.
Volume surged during the pullback from the recent high, signaling significant selling interest. This contrasts with the moderate volume seen during the rally, suggesting that sellers are regaining control. A continuation of high-volume selling could amplify bearish pressure.
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Originally posted 26th November 2024
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