Interactive Investor

Analysis: Bitcoin and Argo Blockchain look gloomy

6th January 2022 07:30

Alistair Strang from Trends and Targets

A year ago, Argo Blockchain was only half-way to a peak above 300p. Independent analyst Alistair Strang reveals what the charts say about current prospects with the shares now below 100p.

Our previous review of Argo Blockchain (LSE:ARB) was perfect in every respect. Except one. There was no triggering event to promote a price rise, itself not an issue, but worse, the potential drop level was only shown on our chart. The share price managed to immolate itself to our illustrated 86p drop target level, completely without any analysis! We had, rather arrogantly, assumed the price intended to head upward, thus feeling there was not need to give a “panic” trigger!

We’re curious if the current state of Bitcoin shall now negatively impact Argo Blockchain's share price. When we previously looked at Bitcoin last November, we’d given an initial drop target around $47,000 with secondary, if broken, around $38,000. Given Bitcoin is presently trading at $43,000, we’re inclined to anticipate ongoing reversals to somewhere around our $38,000 level.

We should mention an unpleasant risk if the $38k level breaks as it risks promoting ongoing reversal down to a hopeful bottom of $29,000. Bitcoin currently needs above $52,500 to dig itself out of this mess.

Argo Blockchain

When we superimpose Bitcoin movements over the last six months with Argo Blockchain, there seems to be some sort of link with Bitcoin trend influences.

As a result, weakness now below 88p risks triggering reversal to 80p next with secondary, if broken, down at 49p and hopefully a bounce. Importantly, we should mention we cannot calculate below 49p, thanks to target levels suddenly being prefaced by minus signs.

Presently trading around 91p, the share price needs to exceed 109p to give a reasonable early warning for coming recovery, as this calculates with the potential of an initial 124p. Secondary, if exceeded, works out at 153p and almost certain hesitation.

Source: Trends and Targets. Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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