Coindicator

Galaxy Digital Holdings Imminent Break Out

Long
TSXV:GLXY   None
I've followed this stock for a while now and have watched it move more or less in tan tum to the crypto market, however this correlation has since been broken as of mid April. It has fact traded downward to $2.07 CAD today meanwhile Bitcoin continues it's steady climb to over $9.7k, which represents nearly a 100% increase from mid-April. This is an very unusual divergence from a fundamental perspective.

From a technical perspective it's trading in a tighten equilibrium on the weekly and very close to the 50 weekly MA support, which gives us a comfortable level to set stops. However given that this stock trades with not much liquidity it can occasionally wicks up and down, hence it might be better to put on a smaller position that you are comfortable with and hold til at least the next earning call or a breakout to the upside. If the latest earning results is any indication, expect Q2 to be significantly more profitable quarter than Q1.

Comment: Not liking what I am seeing here despite very strong fundamentals and balance sheet. Currently trading below book value. Only reason this stock isn't trading higher right now is because the stock doesn't have liquidity.

Not bullish on BTC short-term either and there just isn't any interest in this stock. Great investment for value investor that's bullish on BTC long-term but perfectly reasonable for trader to get out here.

One caveat here is that CEO express intention to increase liquidity of the stock by putting more effort into public awareness which could help the stock significantly in the next 3-6 months if effective.

Comments

From a technical perspective we had a fakeout break to the upside and now we actually broke to the downside. With that said because this is such an illiquid stock and diverges so much from fundamentals I am still a bagholder here. In fact, I would be inclined to add at any prices under $2 as long as Bitcoin is around this 9 - 10k level. The upcoming quarterly earnings should be quite interesting.
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