MSTR is too volatile, how to handle highly volatile stocks for long-term investing?
Hello everyone
In this session, let's talk about a particularly volatile stock recently: $MicroStrategy(MSTR)$ . This stock, deeply tied to Bitcoin, has seen a remarkable surge in its price, driven by Bitcoin's skyrocketing rally. Over the course of just one month, its stock price shot up by 58%. However, since entering December, the price has been oscillating widely between $350 and $420.
Looking at related options products, implied volatility is moderate, but premiums remain high. Meanwhile, FCN products are offering an annualized coupon rate of about 55%, indirectly signaling expectations of high price volatility ahead. This suggests that short-term stock holdings come with significant risks.
So, how should we trade this symbol?
1. Technical trend
From a technical perspective, the weekly chart currently shows a bullish alignment, while the daily chart indicates that the price has been fluctuating within a wide range of $350–$420 since the end of November.
Data source: Tiger trade app
2. Technical Analysis
Support Level: The $350–$370 range has shown strong support, with the price repeatedly touching and rebounding from this zone.
Resistance Level: The recent historical high of $543 is a critical resistance level. If the stock approaches and breaks through this level again, the upward trend could potentially continue.
RSI: The current RSI is around 60, indicating the stock is nearing the overbought zone but still has room for further growth.
MACD: The price remains above major moving averages, suggesting an overall bullish trend. However, there is short-term pressure to test the support level.
3. FCN Quote
Annualized Coupon Rate: 55.44%
Term: 3 months
Strike Price Ratio: 70%
4. Rationale
Strong Technical Support: The support level is robust, providing a high margin of safety.
High Annualized Coupon: Offers an attractive rate with a low strike price ratio.
Bitcoin Fundamentals: Expectations of policy support add a positive outlook for Bitcoin, indirectly benefiting MSTR.
It's important to emphasize that investments carry risks, especially with such highly volatile assets. Choosing the right product at the right time is crucial—proceed with caution!
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
*Conservative Approach*
1. *Wait for Stabilization*: Observe if the stock price stabilizes above $420 or consolidates around $350 before making a move.
2. *Options Trading*: Consider selling options with strike prices above $420 or buying puts to hedge against potential losses.
*Aggressive Approach*
1. *Buy the Dip*: If the stock price dips to $350, consider buying, but be prepared for potential further decline.
2. *Trend Following*: Ride the upward trend if the stock breaks above $420, but set stop-losses to limit losses.
Sell cash secured puts if you don't own shares
Sell covered calls if you own shares
My strategy since i am bagholding due to andrew left shorts (i got greedy, instead of closing my profitable position i decided to hold🥲)
Trade the daily trend
STO CC when on uptrend
Set a BTC order at a price i'm satisfied with
Go and sleep
You won't catch the highest or lowest price, but daily profit on 1 CC at least 350 USD.
Waiting for BTC to break 100k so I can sell off my existing shares and pocket a nice profit. This stock is too unpredictable for me to hold long term comfortably.
Good luck!
強大的技術支持：支撐位穩健，提供較高的安全邊際。
年化息票高：以較低的執行價格比率提供有吸引力的利率。
比特幣基本面：政策支持預期爲比特幣增添積極前景，間接利好MSTR。
需要強調的是，投資是有風險的，尤其是對於這種高度波動的資產。在正確的時間選擇正確的產品至關重要——謹慎行事！
支撐位：350-370美元區間顯示出強勁支撐，價格反覆觸及並從該區域反彈。
阻力位：近期歷史高點543美元是關鍵阻力位。如果該股再次接近並突破該水平，上升趨勢可能會繼續。
RSI：目前RSI在60左右，表明該股接近超買區，但仍有進一步上漲的空間。
MACD：價格保持在主要移動平均線之上，表明整體看漲趨勢。但短期有壓力測試支撐位。