Stock Of The Day: Is The Mara Holdings Death Spiral Finally Over?

Trading is quiet in MARA Holdings, Inc. (NASDAQ:MARA) Tuesday. But since its October peak, the price has dropped by more than 50%. It appears to have found support and may even be forming a new uptrend. We have made Mara Holdings our Stock of the Day.

Some analysts believe that stock prices are random. They think past market behavior doesn't influence current behavior. They also believe that markets can't be out timed.

These analysts are wrong. They don't understand how markets work.

You can see on the chart below that the MARA selloff ended around the $10.20 level. This was not a coincidence. There is support at this level because it was support in April, and there tends to be support at former support levels.

Some of the traders who sold at the support in April came to think their decision to sell was a mistake when the price moved higher. Some decided that, if possible, they would buy their shares back, assuming they could get them for the same price they were sold for.

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So when MARA dropped back to $10.20, these remorseful sellers placed buy orders, and the large quantity of these orders created support at the level again. It wasn't random.

If MARA does rally and reaches $14.90, there is a good chance the rally will end.

In markets, there tends to be resistance at prices that have been support. This isn't random either. It is due to buyer remorse.

Some of the people who purchased shares around $14.90 regretted doing so when this support broke and the price fell below it. When this happened, some of these unhappy traders made the decision to hold onto their losing positions.

But they also decided that if MARA rallied back to $14.90, they would sell. This way, they can get out at breakeven.

If there is a large quantity of these sell orders, it will create resistance. This could put a ceiling over the price.

Markets are not random. Some price levels have more importance than others. If a trader can identity these levels, they can profit.

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