Blockchain technology (or distributed ledger accounting), which can be thought of as computerized interlinked digital accounting (I think) is here to stay, but stocks in the sector have been the subject of a speculative mania, which blew out along with Bitcoin leading to a cull. We saw this coming and dumped all of our Blockchain stocks, after getting rid of Riot Blockchain Inc. (RIOT:NASDAQ) six days earlier at about $23. Riot itself has been the subject of disparagement and scorn, with some of it branding the company as a scam and a bunch of con artists, etc., and while there was certainly a lot of hype about it and management did some things that attracted criticism, like selling loads of shares at the top (seems sensible to me), it is believed to be a legitimate business and some of the attacks on it were the result of envy and "sour grapes," etc., and thought to be baseless.
The log chart gives a different perspective—the very low prices on the early part of the log chart produce distortion.
I say all this because it has been beaten back to its rising 200-day moving average currently at about $9.50, just above which it appears to be forming a potential base pattern in the $10 area, with a run of larger white candles over the past week suggesting that it may be about to rally perhaps back to the vicinity of its falling 50-day moving average now at about $18.70, although it is unlikely to get above the resistance at its January highs at about $17.60 over the short term. However, if it does rally to the $17.60 area it will result in a 70% gain from the current price, and if it makes this move it will happen fast, probably within a week or two, and it could get higher. Given the proximity of significant support at and above the 200-day moving average, we have favorable risk/reward parameters for a quick trade, since we can set a fairly close stop beneath the 200-day moving average, say at about $9.43. Upside is about 70% if it takes off higher from here, since we would probably ditch it near to the January highs, while downside with the stop at $9.43 is about 11%. There is probably a 50/50 chance of such a relief rally. These are good odds for a trade, which may appeal to some of you who are of a more sporting disposition.
Conclusion: Riot Blockchain is viewed as an attractive speculative trade here for more sporting subscribers for a 50/50 chance of a quick 70% approx. gain, with a stop at about $9.43 to limit loss to about 11% (based on Friday's closing price) should it break lower instead.
Riot Blockchain, RIOT on NASDAQ CM, closed at $10.58 on 2nd March 18.
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Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.