Sign InRiot Blockchain, Inc. Shows Potential for Long-Term Bullish Momentum Despite Market Volatility
Summary
Riot Blockchain, Inc. is trading at $12.30 with a 17.25% increase from the previous close, and although the stock is currently oversold, it has a bullish long-term trend, indicating potential undervaluation and a favorable investment opportunity, but caution is advised due to high volatility and uncertainty in the cryptocurrency market.
Technical Analysis
Riot Blockchain, Inc. is currently trading at $12.30 as of August 29, 2023, which marks a significant increase of 17.25% from its previous close. The stock's trading volume was at 41.49 million, up from its average volume of 22.36 million. The Relative Strength Index (RSI14) is at 29, which suggests the stock is oversold and may be due for a price correction.
From a trend perspective, Riot stock is now trading below its 50-day moving average of $14.82, illustrating a bearish short-term trend. However, the stock price is significantly above its 200-day moving average of $9.39, suggesting a bullish long-term trend. The MACD (3-month) is at -2.43, which also affirms the short-term bearish sentiment.
In terms of volatility, the ATR (Average True Range) stands at 9.03, indicating high price volatility. Furthermore, the stock has support and resistance levels at $12.03 and $13.35 respectively.
Fundamental Analysis
Riot Blockchain, Inc., listed on the NASDAQ with a market cap of $2.28 billion, has seen a dramatic rise in 2023 due to exponential growth and ambitious expansion plans. Despite the company's negative EPS of -1.6 and its corresponding negative PE ratio of -7.69, there's excitement as Riot's extremely low costs are leading to wider margins. Furthermore, plans to add more miners and construct new facilities suggest an increase in future production.
The company's discounted cash flow (DCF) stands at $13.95, indicating potential undervaluation at its current price of $12.30. Nonetheless, analyst targets range from a low of $9 to a high of $12, with a consensus median target of $10.50. This single target is lower than the DCF and the current price. This discrepancy between the DCF and analysts' targets may stem from possible risks that analysts perceive in the operations or market environment.
The stock has a consensus rating of 'Buy' from four analysts, with no holds, sells, or strong sells, suggesting a favourable investment opportunity.
Recent News and Its Impact
Recent news reveals growing interest in digital assets, underscoring the growth potential of companies like Riot Blockchain. Additionally, the company has received positive coverage regarding its low costs, expanding margins and plans for future development. Conversely, recent news of SpaceX offloading all its Bitcoin may impact Riot negatively due to its engagement with the cryptocurrency market.
Predictions and Evaluation
Given the technical and fundamental analysis, Riot Blockchain, Inc. may experience a bullish momentum in the long-term, despite short-term volatility. The company's stock analysts rating 'Buy' and a DCF signaling undervaluation supports this possibility. However, investors should remain cautious due to the stock's high volatility and the events unfolding in the wider cryptocurrency market.
For the upcoming trading day, August 30, 2023, the stock may experience a price correction due to being oversold on the current day. For the upcoming week, the price may remain volatile within the range defined by its support and resistance levels, depending on market conditions.
Overall, Riot Blockchain, Inc. is tentatively categorized as a 'Hold.' This is due to the mixed signals from the analysis, with long-term potential tempered by caution due to short-term turbulence and the unpredictable nature of the crypto market.
