The9 Limited Rallies After Acquiring Clean Energy Cryptocurrency Company: Technical Levels To Watch

The9 Limited NCTY shares gained ground Friday after the company announced it signed a definitive agreement to acquire the Canadian clean energy cryptocurrencies mining facility MontCrypto. The9 Limited plans to invest CA$7.6 million ($6.3 million) in two phases to obtain a controlling stake.

The9 Limited was up 25% at $13.68 at last check. 

The9 Limited Daily Chart Analysis

• Shares have been falling in the last few months and are trading in what technical traders call a falling wedge pattern.
• The stock is trading below both the 50-day moving average (green), and the 200-day moving average (blue), indicating sentiment in the stock is likely bearish.
• Each of these moving averages may hold as an area of resistance in the future.

Key The9 Levels To Watch

• The stock potentially broke out of the falling wedge pattern Friday  as the price crossed above the pattern resistance.
• A break above resistance could see the stock move higher, while a break below resistance may hint that the stock is not done falling.
• Another dynamic to look at is the volume spike: if the volume is able to stay above average, the stock may see a stronger push.

What’s Next For The9?

Bullish technical traders would like to see the stock continue to move higher and break out. Traders should watch volume. If it can hold where it is at now, the stock could be ready to see a further spike.

Bearish technical traders would like to see the stock fall back to the area it was trading at near the point of the wedge. If the price fell back below the pattern support, it may see a further downward push.