Crypto-Adjacent Stock Has Room to Run After Rebound

The stock's Relative Strength Index sits in "oversold" territory as well

Deputy Editor
Dec 7, 2021 at 2:57 PM
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The shares of Marathon Digital Holdings Inc (NASDAQ: MARA) are surging today, up 9.8% to trade at $45.91 at last check, as crypto stocks rebound alongside Bitcoin (BTC). The stock hasn't yet recovered its losses from Friday's 15.4% drop, however, its recent pullback has MARA pulling back to a historically bullish trendline.
 
More specifically, Marathon Digital stock has run into its 200-day moving average, after spending a significant period of time above it. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred during the past three years. MARA enjoyed a positive one-month return in 100% of those cases, averaging an impressive 50.4% gain. From its current perch, a similar move would put the security back above the $69 level, putting it closer to its Nov. 9 six-year high of $83.45. 

 

MARA Dec7

It's also worth noting that the security's Relative Strength Index (RSI) of 28 is in "oversold" territory. This means a short-term bounce is likely in the cards. 

There is plenty of short-covering potential, too. Short interest represents 15.5% of the stock's available float. However, it's worth noting that the recent volatility has MARA on the Short Sale Restricted (SSR) list today. 

The stock's Schaeffer's Volatility Index (SVI) of 129% stands higher than 21% of all other readings in its annual range, implying that options players are pricing in relatively lower volatility expectations than usual at the moment. Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at a 99 out of 100, meaning MARA has exceeded these volatility expectations during the past year.

 

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