Riot Platforms Stock Could Extend Today's Rally

RIOT has pulled back to historical support on the charts

Bitcoin (BTC) mining name Riot Platforms Inc (NASDAQ:RIOT) is surging today, up 11.6% at $20.79 at last glance while Bitcoin taps three-month highs. Along with sector tailwinds, RIOT has its own bullish signal to keep an eye on as well. 

According to Schaeffer's Senior Quantitative Analyst Rocky White, Riot Platforms stock is trading within 0.75 times the 260-day moving averages' 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline. This setup has appeared six other times over the last decade, after which the stock was higher one month later 100% of the time, averaging a large 19.7% gain. 

Short interest represents a hefty 14.35% of RIOT’s available float, or more than 50 million shares, and would take shorts nearly three days to cover at the stock’s average pace of trading. A move higher could pressure some of these bearish bettors to exit their positions, creating additional buying power.

Now also looks like a good time to weigh RIOT’s next move with options. The stock’s Schaeffer’s Volatility Index (SVI) of 76% sits in the low 9th percentile of its annual range, suggesting options traders are pricing in relatively low volatility expectations at the moment. Plus, its Schaeffer’s Volatility Scorecard (SVS) stands at 80 out of 100, indicating RIOT has tended to exceed option traders’ volatility expectations during the past year.