RIOT's 40-day moving average has propped up the security three times before
The shares of Riot Blockchain Inc (NASDAQ:RIOT) are surging today, up 20.2% at $21.54 at last check, though a reason for the positive price action was not immediately clear. The last time we checked in on the security, shares were pulling back from fresh highs as Bitcoin plummeted, before surging right back to a Jan. 14, three-year high of $29.98. The stock now sports an impressive 1,533.8% year-over-year lead, and a recent dip has RIOT close to a historically bullish trendline, which could send shares even higher.
Specifically, Riot Blockchain stock just came within one standard deviation of its 40-day moving average, after spending the last few months above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred in the past three years. In 67% of those instances, the equity enjoyed a positive return a month later, averaging a 22% gain. From its current perch, a move of similar magnitude would put RIOT just over the $26 mark -- closer this month's peak.
Digging deeper, a short squeeze could create additional tailwinds for the security, pushing shares higher still. Short interest rose 21.7% in the last two reporting periods, and the 13.07 million shares sod short make up a whopping 81.9% of RIOT's available float.
The options pits, on the other hand, already lean firmly bullish. This is per the equity's 10-day call/put volume ratio of 3.16 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 91% of readings from the past year. In other words, calls are being picked up at a quicker-than-usual clip.