Sign InMarathon Digital Holdings Shows Potential for Improvement with Positive News and Technical Indicators
Summary
Marathon Digital Holdings (MARA) closed at $7.54 on October 4, 2023, with a daily increase of 3.29%, and is expected to experience some improvement in the stock price on October 5, potentially getting closer to resistance levels as technical indicators indicate an oversold status. However, due to the year-long downtrend, negative PE ratio, and market volatility, a cautious approach is recommended, and the stock is currently rated as a Hold.
Fundamental Analysis
Marathon Digital Holdings is actively traded on the NASDAQ exchange under the ticker symbol MARA. The company closed at $7.54 on October 4, 2023, reflecting a daily increase of $0.24 (3.29%).
Marathon Digital has a market cap of $1.30 billion, and the trading volume at the end of the day was 25.18 million, which is slightly lower than the average volume of 30.50 million.
Looking at the annual performance, MARA stock touched a high and low of $19.88 and $3.11 respectively. The 50-day moving average was around $12.01, while the 200-day moving average stood at $9.81.
In terms of profitability, the company's EPS recorded at -$3.47. Consequently, the price-to-earnings (PE) ratio, too, stands negative at -2.14, showing that the firm is presently unprofitable.
On the investor outlook side, 4 analyst ratings were available, identified as "Buy." The low, average, and high price targets stood at $12, $30.60, and $66 respectively, demonstrating a positive sentiment among the investment community.
Technical Analysis
The share price of Marathon Digital stood below the 50- and 200-day moving averages, indicating a recent barring trend. The Moving Average Convergence Divergence (MACD), a trend-following momentum indicator, also remained negative, further affirming a recent downtrend in the stock.
The Relative Strength Index (RSI14), standing at 20, was pointing towards being oversold. This may increase the likelihood of an upward price reaction in the near term as traders seize the opportunity to buy at lower prices. Finally, with the support level at $7.30 and a resistance level at $8.01, it would be crucial to see the price dynamics in the coming days.
News & Events Impact
Regarding recent developments, Marathon Digital announced that its bitcoins mined in September more than tripled from the previous year - an undoubtedly positive sign that shows the company's improved operational efficiency. However, the general cryptocurrency market was severely tested as yields from the benchmark investments struck a new high. The long-term outlook remains positive, as some analysts expect a rally in Bitcoin towards the end of the year and beyond due to various factors such as regular clarity and market environment.
Stock Prediction & Final Evaluation
Based on the technical indicators and the most recent news, it is reasonable to expect some improvement in the stock price on the next trading day, October 5, 2023, potentially getting closer to resistance levels as the RSI indicates an oversold status.
By the end of the forthcoming week, if the positive sentiment following the increase in bitcoins mined continues, we may expect gradual reaching towards the 50-day moving average of $12.01 considering that cryptocurrency market conditions are stabilized.
However, considering the year-long downtrend, a negative PE ratio, and the inherent market volatility associated to cryptocurrency-linked stocks, a cautious approach should be taken. Thus, the stock is currently rated as a "Hold." Yet, investors who are prepared to face potential short-term market volatility and have a long term, bullish perspective on Bitcoin may view it as a "Buy" given its linking with cryptocurrencies and the potential for significantly increased mining.
