For traders and investors involved in the markets and focused on cryptocurrency, the blockchain, and Bitcoin, the month of April has certainly been a welcome relief. The price of Bitcoin rallied during the month nearly 50%, carving out what may turn out to be a key double bottom confirmation of support. Naturally, enthusiasm for blockchain related projects has begun to recover powerfully during this period.
In that spirit, we want to take a look at several stocks that could be poised to benefit from this rejuvenated enthusiasm given recent action and catalysts.
GAIN Capital Holdings, Inc. (NYSE:GCAP) has to be on this list as an interesting play on this renewed momentum in the space.
The company provides innovative trading technology and execution services to retail and institutional investors worldwide, with multiple access points to OTC markets and global exchanges across a wide range of asset classes, including foreign exchange, commodities, and global equities. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe, and the Asia Pacific regions.
GCAP shares have been outperforming most blockchain related plays over the past 6 weeks. The stock continues to hold onto upward momentum in place since late March. Since its lows under $6.50 per share last month, we have seen a rally in the stock of over 30% on strong volume to retake all of its major moving averages on the bullish side and break out to new multi-month highs. At this point, traders are looking for signs that the stock will be able to hold onto its recent gains and breakout even higher.
Xalles Holdings Inc. (OTCMKTS:XALL) is another stock that needs to be watched closely here. If you’re looking for a potential emerging leadership play, then you want to look for companies that have recently made acquisitions to take them into direct operational integration within the blockchain phenomenon. In broad strokes, this is a company committed to the goal of becoming a dominant Fintech Accelerator by providing payment systems through its subsidiaries and partner companies.
The company recently executed a Share Purchase Agreement for the acquisition of BlockForge Inc., a blockchain design, development, and implementation firm. This is particularly important given the recent resurgence of enthusiasm for blockchain, cryptocurrency, and Bitcoin over the past 2-3 weeks. The company’s approach, according to its materials, is to roll up strategic acquisitions that are launching financial supply chain solutions to under-served markets. The focus will be on solutions for the business and Government markets. The goal is to capture recurring revenue streams through services, audit recovery fees, and revenue sharing licenses.
The stock has currently been establishing potential support around the $0.20-$0.25 per share level. This issue hasn’t been trading for long, but the initial action suggests a potential RSI-related bounce setup in play already, as initial liquidity establishes itself and the world becomes acquainted with this interesting story. We would also note that the company recently announced the restructuring of its common stock and the completion of additional debt reduction, which could force the issue in favor of the bulls before long. According to the release, Xalles recently took measures to reduce the number of outstanding shares of common stock by more than 69%.
Overstock.com Inc (NASDAQ:OSTK) is a stock you probably know as an online retailer based in Salt Lake City, Utah that sells a broad range of products at low prices, including furniture, décor, rugs, bedding, and home improvement. However, in addition to such goods, the company has started to move aggressively into the blockchain space over the past year, and its shares now trade far more on that business segment than on its retail business. It would appear as though shares of OSTK have been roughly mirroring the blockchain in Bitcoin trading action for the past month, with the stock pushing as much as 25% off its pivot lows in early April. After a stunning run higher last fall, where shares blasted from $15 to better than $80 per share, the stock has seen a sharp pullback in recent months culminating with a break under the $40 per share level, which also represented a break beneath the 200-day simple moving average.
However, recent action suggests a strong-handed bid entering the picture once again, which could indicate a possible test of major moving averages 10 – 20% above current levels.
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