Why investors should beware stocks getting the bitcoin boost

A handful of stocks is enjoying a form of halo effect from investors' bitcoin mania — however market watchers are cautioning against stepping into the names at current levels.
Shares of overstock.com have surged 118 % within the last 3 months because the company proclaimed it'd enter into the block chain and cryptocurrency house.
Meanwhile, the shares of a tiny, low biotech company, that barely recently proclaimed it'd incorporate block chain technology into its business, are on a huge tear. The corporate, Ernst called Bioptix, modified its name to Riot Block Chain in October -- and instantly saw a surge in its share value. The stock has had a meteoric rise, soaring 586 % within the last 3 months.

Investors have to be compelled to keep one's distance from each name if {they do|they are doing} not perceive that cryptocurrencies are extremely volatile and speculative instruments, aforementioned Ari Wald, head of technical analysis at Robert Oppenheimer.
"Between these 2 connected stocks, structurally one might create the case for buy in over Riot," Wald wrote in associate email to CNBC on Mon.
The trend seems higher for buy in.com, Wald said, and while on paper rise back to even its incomparable high of $77 primarily based upon a technical analysis.
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"Ultimately, it might create its manner back to it $77 level if you are a long capitalist. From a near-term basis, simply given some extended near-term conditions, you would possibly need to undergo a little bit of volatility till you get to those higher value levels," Wald aforementioned Mon on CNBC's "Trading Nation."
Shares of Riot Block Chain, that are listed during an extremely volatile manner over the last many sessions, are still during a long trend of "lower highs," and marketing pressure might shortly emerge, Wald said.
Overstock.com doesn't seem enticing within the least to Eddy Elfenbein, portfolio manager at AdvisorShares.
"I would keep one's distance from this... very far," Elfenbein aforementioned Mon on "Trading Nation."
"It's doubled within the last ninety days, and it's still below its high. There are lots of legitimate debates concerning bitcoin, however, this is often associate overshoot of that discussion," he said, citing the stock's large recent run.
Ultimately, Elfenbein aforementioned, bitcoin may be a "legitimate discussion... [but] these are signs of a prime."
Disclosure: Neither Eddy Elfenbein nor AdvisorShares have positions in buy in.com or Riot Block Chain.

Source: https://www.google.com/amp/s/www.cnbc.com/amp/2017/12/12/why-investors-should-beware-stocks-getting-the-bitcoin-boost.html