Core Scientific: Getting ready for a move higher
Core Scientific is forming a bull flag in the $9-$10 range. These bitcoin miners tend to follow bitcoins price movements on a grand scale, while bitcoin has dropped 20% since June 6th from a high of $71,000, down to Fridays close of $56,600, miners like Core Scientific have stayed steady. It cannot be over emphasized how insanely bullish this is. Core is coming out of bankruptcy which is the only reason it is so cheap to begin with and it has had quarter after quarter of negative net income. On May 8th, they finally reported positive net income for the first time since bankruptcy, beating estimates by over 400%. This resulted in a buying frenzy by institutions, sending the price from $3.50 per share all the way up to almost $11 per share. It has been consolidating since, while bitcoin has been collapsing 20%. In addition, they also announced they signed 12 different AI computing contracts. They are getting into the AI space because it's getting harder and harder to mine bitcoin and eventually, they know they will have to branch out if they wish to remain profitable. They have been using their profits in bitcoin mining to fund operating costs while other miners are simply issuing more shares, diluting the value of their stocks, the list goes on. As you can see in the chart, there is a massive negative divergence forming on the daily timeframe, if Core Scientific contracts downward, I expect a bounce in the highlighted golden pocket zone but this may not happen, it may breakout to the upside but I am very bullish on this stock either way.
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