May 3rd-7th, 2021
Trying something different today…
I should’ve heeded my own advice to stay out of the Market for a bit. Lots of red last week and lots of positions hitting their S/Ls. I’m gonna play it safe this week and hold off on entering anything new.
However, for those of you looking for setups or homework this week. Check out the charts for:
For today’s post, I’m trying something a little different. I’ll be doing a walkthrough of what I do when considering a position. As a thank you to Chris for buying me a coffee, I’m going to analyze $RIOT’s chart for him. Now let’s have a look shall we…
Alright, so according to $RIOT’s website….
Riot Blockchain, Inc. is a bitcoin mining company, supporting the Bitcoin blockchain through rapidly expanding industrial scale mining focused in the United States. We are consistently focused on expanding our operations by increasing our bitcoin mining hash rate, while decreasing our costs of production. Riot believes the future bitcoin mining will benefit from American operations and endeavors to be the driver of that future.
As we can see above, the 5 has crossed the 20 and $BTC is in a Stage 2 breakout. This is a good thing for $RIOT because that means the underlying asset is trending up and therefore should positively impact $RIOT— Think of it like the price of oil ($BRENT) breaking out and you’re considering buying a company like $XOM.
Now let’s take a look at what TipRanks has to say…
TipRanks has it listed as a Moderate Buy with a $64.00 price target (53% upside)over the next 12 months BUT only 1 analyst has weighed in on it, so there’s not a ton of reliable info backing this target. And I don’t have a paid TipRanks account, so I don’t even know the rating of this analyst.
So let’s take a look at $RIOT’s chart again…
- Price has been consolidating (moving sideways) for a bit. It’s found a solid foundation after the last drop and is forming a nice Stage 1.
- The MACD has upward momentum and is getting closer to crossing over to the positive side.
- The TMO has flipped to GREEN which is always good.
- We can see its S/L zone is around $32–35ish or $8.50–9.25 if you’re using a Trailing S/L.
- The 1st Target would be around $64-67 (which is consistent with our TipRanks target.
- The 2nd Target would be around $75–79.
Since it’s a solid Stage 1, you can take a small position now to get in early. Then add to it if/when the price closes above the 20. Then add to it again if/when the 5 crosses the 20.
Based on the distance of the 5 and the 20 right now, all of this could take a minute.
Now let’s take a look at some recent news on $RIOT…
Why Riot Blockchain Stock Fell Today | The Motley Fool
This article from a week ago mentioned the following points:
- “Shares of cryptocurrency-mining company Riot Blockchain (NASDAQ:RIOT) fell on Thursday as the price of Bitcoin (CRYPTO:BTC) keeps pulling back.”
- This tells us that $RIOT moves with $BTC as I mentioned above. Since last week, $BTC is breaking out which bodes well for $RIOT, which should follow its movement.
- “Riot Blockchain is already mining more Bitcoin than it ever has (196 Bitcoin in March), is increasing its computing power (called “hash rate”) to mine even more, and holds 1,565 Bitcoins as of its latest update.”
- As $BTC rises and more people are buying and selling that means it needs more computers mining. $RIOT’s increase in productivity and computing power are both good things in the current climate.
- “Here’s the potential problem Riot Blockchain investors are grappling with: Bitcoin is possibly losing its dominance. The term “Bitcoin dominance” refers to Bitcoin’s share of the total cryptocurrency market.” … “Alt-coins like Ethereum and others have gained market share in recent days. If people are starting to replace Bitcoin with these other options, it could lead to further declines in Bitcoin’s price and make the long-term outlook for Riot Blockchain’s business less optimistic.”
- For a long term investment this could spell trouble, but for a shorter term swing trade this is less of a worry.
Hopefully that walkthrough shows you a glimpse of how I look analyze a setup when considering a potential position. Y’all can thank Chris for this post. I’m considering doing more requests as a thank you to those who buy me a coffee or maybe just making that part of the memberships on the SpockTradez BuyMeACoffee page. If that something you all would be interested in, please let me know in the comments. The Market is still a little volatile, so trade safe out there!
Trade long and prosper!