On Sunday evening, Benzinga asked its followers on Twitter what stock they’re zeroed in on this week. From the replies, Benzinga selected one ticker for technical analysis.
Fitsum @fitghi15 responded to say they’re focusing in on Coinbase Global Inc COIN.
Coinbase was surging up over 8% in the premarket on Monday in tandem with Bitcoin BTC/USD and Ethereum (CRYPTO: ETH, which were rising about 4% and 7%, respectively. Bitcoin’s spike caused the crypto to break up from a falling channel pattern, which Benzinga pointed out was likely to happen on Friday.
The crypto trading platform has also been bolstered recently by Robinhood Markets, Inc HOOD, which reported strong growth in revenues from crypto transactions when the latter reported its quarterly earnings. Traders and investors will be watching closely to see if Coinbase has enjoyed the same uptick in revenues when the company prints its third-quarter financial results on Tuesday.
For the quarter, analysts estimate Coinbase will print a loss of $2.68 earnings per share on revenues of $830.52 million.
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The Coinbase Chart: Coinbase reversed course into an uptrend on June 30 and has since made a consistent series of higher highs and higher lows. The stock’s most recent higher low was formed on July 26 and $52.63 and the most recent confirmed higher high was printed at the $79 mark on July 20.
- Coinbase has soared almost 40% higher since the market closed on Tuesday, which has caused the stock to become extended to the upside. Coinbase’s relative strength index (RSI) is measuring in at about 70% and when a stock’s RSI reaches or exceeds that level it becomes overbought, which can be a sell signal for technical traders.
- On Friday, Coinbase almost printed an inside bar pattern, dropping just slightly below Thursday’s mother bar range. On Monday, traders can watch for Coinbase to begin trading with a second inside bar and then watch for a break up or down from Thursday’s mother bar to take place later on Monday or over the next few days on higher-than-average volume.
- If Coinbase continues to run higher into its earnings print, there’s a chance the stock could sell off following the results, regardless of whether the company beats or misses. Bullish traders would prefer to see the stock trade sideways or slightly lower heading into Tuesday, which would also help to cool Coinbase’s RSI.
- Coinbase has resistance above at $112.14 and $129.29 and support below at $83.32 and $60.99.
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