Marathon Digital Holdings, Inc. (NASDAQ: MARA) seems to be gearing up for a surge as per its latest charts. Marathon Digital Holdings, Inc. operates as a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets in the United States.
The stock was also a part of our watchlist for last week.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out of a symmetrical triangle pattern, which is a possible bullish sign. A symmetrical triangle is a continuation pattern and is characterized by two converging trendlines connecting a series of sequential peaks and troughs. This is marked on the daily chart as oranges color lines.
MARA – Daily Chart
#2 Trading above MAs: The price is currently above its short-term moving average of 50-day SMA as well as its longer-term moving average of 200-day SMA. This implies a possible bullish bias for the stock.
#3 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#4 Bullish ADX and DI: The ADX line has started to move up from below –DI and +DI lines. The +DI line and ADX line are also currently above the –DI line. This indicates possible bullishness.
#5 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the daily chart. This indicates possible bullishness.
#6 Fibonacci Support: Usually, after an up-move, stocks typically retrace to any of the key Fibonacci levels before surging back again. The weekly chart shows that the stock had taken support near the 38.2% Fibonacci support level before moving higher. This seems like a bullish sign.
MARA – Weekly Chart
#7 Bullish MACD: The MACD line (blue color) is currently above the MACD signal line (orange color) in the weekly chart as well, indicating possible bullishness.
#8 Bullish ADX and DI: In the weekly chart as well, the ADX indicator shows bullishness, as the +DI line is currently above the -DI line.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for MARAs is above the price of $49.
TP: Our target prices are $56 and $62 in the next 1-6 months.
SL: To limit risk, place a stop loss at $44.70. Note that this stop loss is on a closing basis.
Our target potential upside is nearly 14% to 27% in the next 1-6 months.
For a risk of $4.30, the target rewards are $7.00 and $13.00. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical triangle pattern. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in its sector.
Happy Trading!
— Tara
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