MSTR Stock Could Slip to $150 as Strategy Responds to MSCI on DAT Exclusion

Source: CryptoNewsNet Original Title: MSTR stock could slip to $150 as Strategy responds to MSCI on DAT exclusion Original Link: Strategy, formerly known as MicroStrategy, dropped by over 1.30% on Dec. 10 after the company posted its response to MSCI on the proposal to exclude Digital Asset Treasury companies from indices.

Stock Price Movement

Strategy stock dropped to $185, a few points below this week’s high of $197.

Company Response

In a statement, the company explained why MSCI should not exclude it and other similar companies from its indices. Strategy argued that it is an operating company and not an investment fund. Its main difference with other firms is that it has decided to use Bitcoin (BTC) to generate returns to its shareholders.

Strategy also argued that the digital-asset-specific 50% threshold that MSCI has proposed was arbitrary, discriminatory, and unworkable. It pointed to companies in other industries that have concentrated holdings in a single asset type. For example, some companies have accumulated large assets like land and gold that would be spared by MSCI’s rules.

Additionally, Strategy contended that the proposal will inject policy considerations into indexing and stifle innovation in the United States and other countries.

MSCI Review

The statement came after MSCI announced it was reviewing whether to exclude DAT companies from its indices, arguing that these companies resemble investment funds rather than operating firms. A major US financial institution has supported this move.

Potential Impact

A move to remove Strategy from MSCI’s indices would have a major impact on the stock. It would force most funds that hold the stock to sell it, leading to more pressure at a time when it is stuck in a bear market.

Some of the top funds that hold Strategy stock include major ETFs focused on total stock market, technology, and growth sectors.

Technical Analysis

The daily chart shows that Strategy stock price has been in a strong freefall in the past few months. It has formed a few bearish patterns, pointing to a continuation of this decline.

Strategy has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. It also formed an inverse cup-and-handle pattern, and remains below the 50-day and 100-day Exponential Moving Averages.

Therefore, there is a risk that Strategy stock price will have a bearish breakout, with the next target being at $150, representing a 20% decline from the current level.