Trading Strategies For Robinhood Stock Before And After Q1 Earnings

Robinhood Markets, Inc HOOD is set to print its first-quarter earnings after the markets close Wednesday. The stock was trading slightly lower heading into the event.

When Robinhood printed a fourth-quarter earnings miss on Feb. 8, the stock was volatile the following day, gapping up over 5% before retracing to close 3.72% lower.

For the fourth quarter, Robinhood reported a loss of 19 cents per share, missing a consensus estimate of a loss of 14 cents per share. The trading platform also missed on revenues, posting $380 million, which came in under the $397.1-million consensus estimate.

For the first quarter, analysts, on average, estimate Robinhood will report a loss of 61 cents per share on revenues of $424.53 million. Read more here...

Traders and investors will be watching closely to see if Robinhood was able to bring customers back to its platform after losing 800,000 monthly active users sequentially in the fourth quarter.

From a technical analysis perspective, Robinhood’s stock looks bullish heading into the event, having recently negated a steep downtrend. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

The Robinhood Chart: Robinhood reversed course on May 4, and on Tuesday, the stock negated its uptrend by rising above the most recent lower high, which was formed on April 28 at $8.94. On Wednesday, Robinhood bounced up from its high-of-day and was working to print a hammer candlestick, which could indicate the local bottom and occurred, and the stock will rise higher on Thursday.

• If Robinhood receives a positive reaction to its earnings print, Wednesday’s low-of-day will serve as a higher low to confirm a new uptrend. Bullish traders will then want to see the stock rise above Wednesday’s high of day. If that occurs, the stock could run into resistance at the 200-day simple moving average.
• Bearish traders want to see big bearish volume come in following Robinhood’s earnings to drop the stock under the $8.21 level, which would suggest the recent bullish action was a trap and the longer-term downtrend will continue.
• Robinhood has resistance above at $8.99 and $10.10 and support below at $7.71 and $6.81.

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