A Technical Breakout for the Industry Could Catalyze This Microcap Exponentially

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Wednesday, April 12, 2023

Traders love to look for patterns that could possibly give them any sort of edge against the market. Holidays are always part of this focus, usually because overall sentiment can be a little more volatile around days when the markets are closed. So, how about the Good Friday holiday?

Quantified Strategies dug into this, evaluating data for the S&P 500 since 1960. The analysts determined that the day leading into the Christian holiday of Good Friday, better known as Holy (or Maundy) Thursday, is the day to pay attention to. Analyzing 63 trades of buying the index at close on Wednesday and selling it at close on Thursday, Quantified Strategies showed an average gain per trade of 0.35% and win rate of 68%. Keeping in line with averages, the S&P 500 closed up 0.36% on Holy Thursday last week.

S&P 500 gainers on Thursday were led by Catalent (NYSE: CTLT), First Republic Bank (NYSE: FRC), and Google parent Alphabet (NASDAQ: GOOGL).

Evidence of follow through historically isn’t there, though. The trading week following Easter Sunday was as unpredictable as any typical week. That means market participants will look to due diligence, news events, and technical analysis to find trades.

Bitcoin is a perfect example of a chart to keep an eye on. The cryptocurrency has found technical resistance around $29,000, which dovetails with prior support in the area in May and June 2022. If BTC can break over $29,000, it won’t see real resistance again until $31,000 and $31,900. 

This will have the attention of traders of Bitcoin and peripheral companies, like Bitcoin miners. Simply put, the more Bitcoin is worth, the more miners collect for every contribution they make to the blockchain by solving complex algorithms to earn Bitcoin. Every tick that Bitcoin goes up correlates to higher profit margins for BTC miners. As such, when Bitcoin heats up, typically related stocks move too.

For some, rising BTC is disproportionately more valuable. Take, for instance, BitMine Immersion Technologies, Inc. (OTCPK: BMNR), a company that has benefited from the sharp pullback in BTC ahead of the launch of mining operations in Trinidad and Pecos, Texas.

In November 2021, Bitcoin was making a record high at $68,978. That was followed by a retrace all the way down to a low of $15,546 nearly one year to the day later. The precipitous $50,000 price drop forced over-leveraged miners out of business and resulted in fire sales of premium equipment to cover debts. Not saddled with any real debt to speak of, BitMine was able to acquire assets for its flagship operations for pennies on the dollar. 

As the name implies, BitMine is specialized in using immersion technology in its Bitcoin mining operations. Immersion is an advanced cooling technique whereby computers are submerged in specialized oil circulated to keep units operating at optimal ambient temperature, resulting in lower operating expenses and increased yield.

Heat is transferred from the computers to the fluid where it is transported away to be rapidly cooled and returned to the mix. With such precision thermal control, the mining rigs, also known as ASIC (Application Specific Integrated Circuit) miners, are able to be overclocked. Overclocking is computer lingo for pushing performance beyond the manufacturer’s specifications. 

The beauty of overclocking is that an ASIC miner being overclocked because of immersion will produce more calculations per second than an ASIC miner using mechanical fans, ambient air, and mechanical fans. In mining, controlling energy use and maximizing computational speed are the keys to success. 

With all the requisite equipment in hand, pilot operations are constructed in Trinidad and Pecos, Texas and just waiting to be energized. In March, BitMine said it has hammered out low-dollar electricity supply agreements with local providers with start dates are imminent.

The timing of that announcement, if it happens to coincide with a Bitcoin resistance breakout, could be just the catalyst that this ultra-low float stock is looking for.

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BitMine Immersion Technologies, Inc. (OTCPK: BMNR) Full Corporate Write-Up: Click Here.

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