Silvergate Capital Plummets 40% and Looks Severely Tarnished

The crypto-based bank has delayed their annual SEC filing. Let's check the charts.

Shares of Silvergate Capital Corp. (SI)  are gapping lower into the single digits in early trading Thursday. The crypto-based bank has delayed their annual SEC filing on the heels of higher losses and a regulatory probe, while a major sell-side firm has turned bearish on the stock.

Let's check out the charts. 

In the daily bar chart of SI, below, I can see that the shares have been in a heart-stopping decline the past year. SI trades below the declining 50-day moving average line and is "extended" below the weak 200-day line.

Trading volume has been heavy in the past four months but it has not produced a change of ownership to strong hands. The daily On-Balance-Volume (OBV) line shows strength in February but that may be due to short-covering. The Moving Average Convergence Divergence (MACD) oscillator failed at the zero line and has turned lower to a new sell signal. 

 

In this second daily bar chart of SI, below, I zoomed in on the past three months to show the indicators better. 

 

 

 

In this weekly Japanese candlestick chart of SI, below, I see a bearish picture. Prices are in a longer-term downtrend below the weak 40-week moving average line. The candles do not show any bottom reversals and no lower shadows.

 

The weekly OBV moved up sharply in an "unsustainable move." The MAC oscillator is weak. 

 

 

 

In this daily Point and Figure chart of SI, below, I can see a downside price target in the $4 area. 

 

 

 

Bottom-line strategy: Avoid the long side of SI. 

 

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