Shortselling
Nifty 50 Analysis based on price actionAnalysis based on price action to figure out how price reacts along with option chain, multiple pattern formation, tried to test Elliot wave too, retracement levels marked as per fib retrace, day low considered as strong support along with 2 resistance level as per Fibonacci. Candle stick analysis. Also used volatility index to figure out the movement of the market and levels it would break. Volume played special role today in breaking the support zone. Price stayed range bound until 1300 hours and then a sharp fall was seen. Expecting a Gap up on Monday with atleast 70 to 80 point and then another reversal.
PacWest - Bollinger Bands breakouton 5 min time frame, using indicator BB with RSI, entry taken as per Divergence, movement confirmation with Stoch RSI, Heikin-Ashi, Gap up opening confirmed reversal to the price calculated earlier on weekend for price to open @ $5.50 wherein pre market showed jump in price due to dividend cut decision by bank to -96%, total duration of trade is around 1 hr 30 min. Was able to achieve target defined with almost 14% gain. Closed the trade as per candle confirmation (hammer candle formed at the bottom - which gave upward confirmation to closed the trade.
Is Silvergate the Next Crypto Company To Fall?Who are Silvergate?
They are a crypto bank and much of their business is from large crypto investors who use Silvergate as a middleman to buy crypto from exchanges.
They work with most, if not all major crypto exchanges… including FTX.
Strong links to FTX & SBF
Sam Bankman-Freid endorsed them, particularly their “risk management” department… we all know about SBF’s risk management credentials.
FTX held some deposits at Silvergate in what’s known as an omnibus account—meaning the assets belonged to FTX customers. It was FTX’s responsibility to keep a ledger tracking the underlying customer assets, a common setup for firms that aren’t banks themselves.
Silvergate wouldn’t have had visibility into the omnibus account to know whether FTX or its underlying customers were moving assets, people familiar with the relationship said. FTX has halted withdrawals, and Silvergate has told customers it cannot take direct requests to withdraw from the FTX accounts.
My Fears
-Contagion of FTX could spill over into this stock
...
- It is the second-most heavily shorted regional bank
-“No bank in the world can honor every deposit held on its balance sheet with cash” - analyst Michael Perito
- Bank of America Quote
“After earnings, we posed the question: ‘Is the worst behind them?’” Bank of America analysts wrote in downgrading the stock. “We were wrong.”
- Morgan Stanley has once again lowered its 2023 EPS estimate for Silvergate Capital (NYSE:SI), arguing that the digital asset-focused bank faces a "wide range of outcomes and risks" from the demise of crypto exchange FTX.
- Silvergate (SI) disclosed last week that its average quarter-to-date digital customer deposits slid to $9.8B (excluding FTX deposits) as of November 15 from $11.9B on September 30.
- Manan Gosalia, an equity analyst at Morgan Stanley, estimated that Silvergate's (SI) digital deposit balances for quarter-end will drop further to $5B
So this would mean they are down 64% in deposits from the start of the year…
- Founder of EOS Developer Block.One Buys 9.3% of Crypto Bank Silvergate
... Why does the company need to sell nearly 10% of its equity? It seems a very coincidental time to be selling stock.
Does it need to raise capital?
