Riot Platforms Inc. (NASDAQ:RIOT) was poised for an upside as its charts formed a golden cross, and experts pointed out a potential for a significant short squeeze due to high short interest, mimicking the surge in stocks like GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings Inc. (NYSE:AMC).
Check out the current price of RIOT stock here.
What Happened: An X post by crypto commentator @alliseeis_W accumulated the views of all the crypto experts and highlighted a list of reasons for RIOT’s stock could soar.
While the golden cross was evident from Benzinga Pro‘s data, an influential analyst @CryptoKaleo, who is bullish on RIOT, was cited, “forecasting a potential massive short squeeze similar to legendary runs seen with $GME and $AMC.”
A short squeeze is a situation in which the price of a stock rises to such an extent that investors who have sold the stock short have to purchase it in order to limit their losses, causing the price to rise further.
About 24.3% of RIOT's publicly available shares were shorted as of the settlement date on June 30, having an effective date of July 10. The average daily trading volume during the latest period increased from 42.076 million to 45.518 million shares.
Additionally, as investors expect RIOT to report earnings on July 31, next week, its outlook could be bolstered by unrealized gains from holding approximately 19,000 Bitcoins, valued at around $570 million.
This is possible because of the Financial Accounting Standards Board’s new accounting rule for recognizing gains and losses on the company’s balance sheet every quarter.
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Technical Analysis
According to the technical charts of Riot, as per Benzinga Pro, the stock formed a golden cross on July 18, where the 50-day moving average surpasses the 200-day moving average.
Golden crosses often form during a steady uptrend, often cause an additional upswing in stock price once the market identifies the signal.
Currently, its stock price of $14.69 apiece as of Thursday’s close was above its short and long-term simple daily moving averages.
Its momentum indicator was also positive as the MACD line was above the signal line, representing its 26-week exponential moving average being above its 12-week EMA, thus signalling a bullish trend.
However, the stock’s relative strength index at 77.69 was in the overbought territory, indicating a potential reversal or consolidation in the near term.
Price Action: On Thursday, RIOT’s shares rose 2.44% during the regular trading session, but they fell by 2.25% in premarket on Friday. It was up 40.44% year-to-date and 36.91% over the past year.
Benzinga's Edge Stock Rankings indicate that RIOT maintains solid momentum across short, medium, and long-term periods. However, while the stock scores moderately on value, its growth rating remains relatively weak. Additional performance details are available here.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Friday. The SPY was up 0.17% at $635.47, while the QQQ advanced 0.11% to $565.62, according to Benzinga Pro data.
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Photo by T. Schneider via Shutterstock
