Note to Readers: While this report on Canaan Inc. (CAN) showcases the strength of the SIACharts system, please be aware that this stock falls outside the typical risk parameters due to its speculative, low price, and volatile nature. As always, the daily stock report analysis is intended as a demonstration of the software’s capabilities, not as investment advice. Readers should exercise caution and conduct their own due diligence before making any investment decisions.
In today’s digital age, we have seen the emergence and adoption of crypto mining and blockchain technology. Therefore, we are going to highlight Canaan Inc ADR (CAN) today, which is a developer of supercomputing chips and the manufacturer of digital blockchain computing equipment, as well as the supplier of the overall scheme for computer software and hardware of digital blockchain. The equipment manufactured by Canaan is sold to many countries, including China, the United States, Hong Kong. It derives a vast majority of its revenue from China, and its products include Kanzhi AI and Avalon Mining Machine.
Canaan Inc (CAN) recently re-entered the Favored Zone of the SIA International ADR Index report on September 24 at a price of $0.89. The shares are showing strong relative strength. Moves up the SIA International ADR Index report, gaining 31 spots in the last week, 154 spots in the last month, and 221 spots in the last quarter exemplify the consistent money flow increases in the shares over the past little while. Currently, the shares reside in the top spot out of 249 positions in the report, at a price of $1.31 as of Friday’s close.
In looking at the attached one-year daily candlestick chart of Canaan Inc., the shares found a nice bottoming pattern at the $0.70 area, which started back in April and continued through to earlier last month. This pattern can be seen as encouraging, because it signifies the bears were exhausted and the selling pressure is alleviating. In the most recent timeline, the company reported encouraging news, with partnership agreements with Luxor Technology to provide flexible financing solutions, and another partnership with Soluna Holdings Inc to deploy 20MW of Next Gen Bitcoin miners at a wind-powered data center in Texas. Then, just last week, Canaan secured a landmark purchase order from a US-based Bitcoin miner for more than 50,000 of its latest generation Avalon A15 Pro mining machines.
With these positive developments, we see the shares break out above their bottoming pattern and recently break above prior resistance at the $1.00 area, potentially confirming that the bottoming phase has passed and the beginning of a new uptrend is in place. With such a strong move in the last few days, the shares may look to take a breather to digest their gains, but if they can hold support at the $1.00 area, which was the prior resistance point, it would provide an encouraging view that the beginnings of this uptrend could be sustainable. Resistance is at the high $1.50 area, which the shares bumped into last week. Pay attention to these two price levels, and if the shares break above or below them, it may provide an indication of what direction the trend is moving toward.
The benefit of looking at Point and Figure charts is that you can more precisely identify upcoming support and resistance levels. In reviewing the Point and Figure chart at a 2% scale for an investment-grade analysis, we see that the shares have indeed broken above their prior resistance point, most recently at the $0.97 level, which is an encouraging sign. The next resistance is at $1.47, which is where the long-term downtrend (red) line currently resides. A break above this level would be crucial for continued confirmation of the uptrend, with the next resistance level approximately at the $2.10 area.
To the downside, the shares may find support at the 3-box reversal of $1.21, and below that, at $0.97, which represents the prior breakout point. The shares currently exhibit a bullish Spread Triple Top pattern, and with an SMAX score of a perfect 10 out of 10, Canaan Inc is demonstrating very strong near-term strength against the asset classes.
Also of note, CAN is classified within the SIA Computer Hardware sector, which holds a Favoured rating in the SIA Stock Sectors report, indicating a positive sector backdrop for the name.
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