Playing Crypto

03/04/21 04:01:41 PM

by Stella Osoba, CMT

With Bitcoin ($BTCUSD) surpassing $50,000, one might wonder how to get exposure in this segment of the market?

Security: BR
Position: N/A

There are many ways to play a particular market segment and some are not necessarily the most obvious. It might be wise to look at segments which service the particular sector or stand to gain in someway from its rise. To illustrate this point we will take a look at Broadridge Financial (BR).

BR is a large cap technology company in the software industry. It provides investor communications and technology solutions to a variety of financial institutions including banks, broker-dealers, mutual funds and corporate issuers. Its acquisition of Shadow Financial Systems, Inc. in 2019 gave it an exposure to cryptocurrency. As BTCUSD has surged in price a look at BR's charts can give us insight as to whether this company is also benefiting from that growth.

Figure 1.

Graphic provided by: StockCharts.com.

Figure 1 is a weekly chart of BR which shows that the stock had been on a long term up trend from early 2013 (when it broke out from a sideways trading range) until mid 2018 when it reached a new high of just over $130. BR then proceeded to form a multi year trading range.

Figure 2.

Graphic provided by: StockCharts.com.

In July 2020, BR broke out of that trading range (see Figure 1). It traded at a high of $158.36 on January 7, 2021 before giving up its recent gains in a deep reaction (see Figure 2). The long upper tails that formed on the candlesticks of January 7 and 8 were forewarning of the reaction. Price subsequently fell and proceeded to form a double bottom as shown in Figure 2.

Figure 3.

Graphic provided by: StockCharts.com.

Figure 3 is a Point and Figure chart of BR. It shows that BR has recently completed a double breakout, which from a technical perspective is positive for the stock.

As always remember to always do your own research. Everything I write about in these articles are intended to be used for for educational purposes only and are not recommendations to buy or sell securities.

Stella Osoba, CMT

Stella Osoba is a trader and financial writer. She is a frequent contributor to "Technical Analysis of Stocks and Commodities" magazine and "Traders.com Advantage" as well as other financial publications.


E-mail address:	stellaosoba@gmail.com

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Playing Crypto

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