Here’s your trade on Marathon Digital $MARA – July 1, 2024
Dan Fitzpatrick here at StockMarketMentor.com. Let’s look at MARA ( NASDAQ: MARA ).
What did I tell you last week? I featured this in a Chart of the Day, noting that this was in a volatility squeeze, a pretty nice one, a really nice one. The stock breaks out today, in massive volume, Bitcoin is up, still in a range, but it’s up. I know many people have given up on Bitcoin because that’s what you do when a stock, or in this case, a crypto, starts going sideways for a while.
Then when it ultimately breaks out, runs another 15 percent, that’s when you’re going to say, Gosh, maybe I should get back into Bitcoin. That’s the nature of the beast, you’ll buy high, and then Bitcoin will roll over, pull back, you’ll sell in a panic, and then Bitcoin will run up again and you’re going to get pissed and think the market’s rigged.
Now, if you want to prove me wrong, good for you. Because that means you’ll be making money. You stick with your thesis on things through hell or high water. That brings me back again to MARA ( NASDAQ: MARA ). What I’ve liked about this is, okay super, super volatile here. We made some really good money a while ago, a few years ago when this thing started to rip here.
We did really, really well on this, but those days are gone and we keep that money, though. Now, I’m looking at this, big, big volatility here. But then what? Since this big move here on the 20th of May, we’ve had this sideways drift, these tightening highs and lows, more of a flat base on the bottom.
But these highs were getting successfully closer to the lows, and volume was basically low, compared to back here. We had relatively low volume, not super low but average low. And then even last week when this started to tick up it was below-average volume. This is what you want to see. In a squeeze, you want to see a sideways range, a range sideways.
When the stock is ranging, when it’s in a tightening range, you want to see it happening on lower volume. Because that’s telling you that the supply is still there, so that’s keeping the stock down, but it’s gradually being absorbed by buyers. We can see this because the stock has a floor right here, but it’s gradually being absorbed by buyers.
Once that volume gets to a certain level, where there’s no more supply here, boom, this is what we get. So this is what we’ve got here on MARA ( NASDAQ: MARA ). Where we entered this stock today, it was actually a little bit late because I was literally on ice. We got in at this stock at 22.18.
We got in the stock right here, 22.18, and I decided to put our stop down here just below today’s intraday low, with the idea that, okay, I’m buying this stock because I think it’s breaking out. So how am I going to know I’m wrong? Well, if the stock completely retraces today’s move, then it tells me that it’s just a big fake-out like we had here. This is what our trade is and you can follow along, even though you’re not a member of Stock Market Mentor, it’s okay.
Free Chart