The next upward wave is underway - Coinbase, Desert Gold Ventures, Infineon

Coinbase - Ready for the next upward wave

After a mega performance that saw the share price explode by around 165% between the end of October and December 28, 2023, reaching an interim high of USD 187.39, Coinbase has sharply corrected around 33% to USD 125.20. From a purely technical perspective, this represents a normal downward movement, which, as of today, amounts to around 50% of the upward momentum. In this range, the US cryptocurrency trading platform appears to be forming a bottom and, with a rising Bitcoin, could ignite the next upward wave with new yearly highs.

Following the recent setback, the investment bank Oppenheimer now sees significantly higher prices due to an attractive risk/reward ratio and upward-looking fundamental data. It has raised its investment rating for Coinbase to "Outperform" with a price target of USD 160.

Analyst Owen Lau emphasizes that the recent decline in the share price could offer investors a tempting risk/reward combination. In addition, the approvals for several Bitcoin spot ETFs could positively impact the share price. "The stock has been closely watched during the crypto winter. While many of its competitors failed, Coinbase is sticking around and standing up for its business and the industry," Lau is quoted as saying by CNBC. He adds: "We believe the Company is more robust than many assume, and management more resilient than many investors suspect."

Lau also predicts that Coinbase will either win the Litigation with the SEC or that the case will be dropped altogether, which could further drive the Company's growth.

Desert Gold Ventures - Ambitious plans

Desert Gold Ventures, a Canadian gold explorer, is focused on its extensive SMSZ gold project in the Senegal-Mali Shear Zone, which covers 440 sq km and is in close proximity to producing mines of major companies such as Barrick Gold, Endeavour Mining and B2Gold. Allied Gold's Sadioka mine is directly adjacent to this area. The project currently has Indicated Mineral Resources of 310,300 ounces and Inferred Mineral Resources of 769,200 ounces of gold.

In 2023, Desert Gold conducted an extensive drilling program with 445 drill holes and a total length of 2,067 meters and plans for a much larger program in the coming year with a total of 30,000 meters.

Despite the promising prospects and the high gold grades in the region, Desert Gold is trading at a market capitalization of only around CAD 9 million, which represents an attractive opportunity for anti-cyclical investors. An ounce of gold in the ground is currently valued at less than USD 6, which in turn offers new investors an opportunity to buy into the project at a favourable price.

Desert Gold's CEO Jared Scharf and the management team are currently negotiating with potential strategic partners to fund the prefeasibility study and mine construction with the aim of starting production in the second half of 2025. In addition, the Company is considering exploring the near-surface gold commercially in a joint venture, which should significantly increase cash flow for future drill programs and resource expansions.

Infineon - Peer group puts the brakes on

The continued upward movement of the Munich-based semiconductor manufacturer was slowed last week by two reports from the peer group. Firstly, Intel disappointed with its outlook for the current quarter, and secondly, Swiss competitor STMicroelectronics shocked with weak figures and a significantly gloomier outlook of a 15% drop in revenue for the current quarter.

STMicroelectronics announced that lower demand from the automotive industry and a further decline in orders from the industrial sector were primarily responsible for the weak figures. The Company, whose customers include Tesla and Apple, expects sales of USD 3.6 billion for the current three months compared to USD 4.25 billion in the previous year.

Despite the bad news, the Infineon share was able to defend the critical vertical support area of around EUR 34. In order to further improve the chart picture, a jump above the downward trend at EUR 35.35, which has been in place since the beginning of the year, would be necessary. Then the yearly highs at EUR 39.34 would beckon again.

After a correction of around 20%, analysts see an improved risk/reward ratio for Coinbase shares. Infineon was able to withstand the headwind from its peer group. Desert Gold is planning a major drilling program of 30,000 m this year.