Sign InRiot Blockchain Inc.: Mixed Signals Point to Volatility and Potential Price Appreciation
Summary
Riot Blockchain Inc., a key player in the cryptocurrency industry, closed at $8.87 on October 20, 2023, showing a slight increase from the previous session, while technical analysis suggests a bearish sentiment, the recent news and DCF valuation point towards potential price appreciation, making it a Hold with a close watch on market conditions and company news recommended before making any trading decisions.
Company Overview
Riot Blockchain, Inc. (NASDAQ: RIOT) is a key player in the cryptocurrency industry. The company closed the latest trading day at $8.87 within a daily range of $8.82 - $9.4 on October 20, 2023, and reported an increase of 0.57% from the previous session. The market cap currently stands at $1.64 billion
Technical Analysis
In terms of technical analysis, the Relative Strength Index (RSI) of Riot is 40, indicating a slightly bearish scenario. A reading below 50 often suggests that the stock is not in a strong upward trend. The MACD (Moving Average Convergence Divergence) of -0.33 also indicates bearish sentiment.
The 50-day moving average of the stock is $10.60, and the 200-day moving average stands at $10.47. Given that the stock's current price is less than both these averages, this indicates a negative sentiment in the market for this stock.
The stock has support at $8.84, quite near to the last close at $8.87. If the stock falls below this level, it could indicate further downward movement. The next resistance at $9.42 is slightly higher than the previous day's high, suggesting a potential upward move if it crosses this level.
Fundamental Analysis
Riot's earnings per share stand at -$1.59, and the PE ratio is -5.58. The negative EPS and PE indicate that the company is currently not profitable.
The target consensus for the stock, which is determined by analysts' estimates, is $10.5, a decent increase from the last trading price. This implies that analysts on average expect the stock price to increase in the future. Four analysts rated the stock as a "buy" with no "sell" or "hold" recommendations.
News Analysis
The recent news for Riot is mixed. On one hand, an analyst recently cut the price target on Riot Blockchain by one third. This suggests that analyst sentiment may be turning negative. On the other hand, Riot was highlighted as one of the stocks poised to make a comeback, indicating the company could outperform in the future. Moreover, a consensus view is pointing to undervalued growth stocks that could double in performance next year.
DCF Valuation
The company's discounted cash flow (DCF) stands at $10.52, which is above the last close of $8.87. Typically, if the DCF is more significant than the current stock price, it could signal an undervalued stock and a potential buying opportunity.
Stock Price Prediction and Evaluation
The trading day on October 23, 2023, could likely follow the mixed sentiment indicated by the technical analysis and recent news. The stock might test its support levels given the overall bearish momentum but there could be an upside if it breaks past its resistance considering the expectation from the news and DCF valuation.
For the upcoming week, the stock could exhibit some volatility due to the contrasting signals from its technical indicators and analyst expectations.
Given the technical and fundamental analysis, and recent news, Riot Blockchain Inc. should be considered a Hold. Although the technical indicators hint at a downward trend, the positive news and DCF valuation, along with the consensus "Buy" recommendation suggest potential for price appreciation in the future. Keep a close eye on market conditions and company news before making any trading decisions.
