Robinhood Surges On Crypto Revenues, Pulls Coinbase Higher: Here's What To Watch

Robinhood Markets, Inc HOOD was skyrocketing over 11% higher on Wednesday after printing its second-quarter financial results after the close on Tuesday.

The trading platform printed mixed quarterly results, reporting a loss of 34 cents per share, which beat the consensus estimate of a loss of 37 cents per share. Robinhood reported revenues of $318 million, which missed the estimate of $321.12 million.

The market was impressed that Robinhood grew its transaction-based cryptocurrency revenues during the second quarter by 7%. When the company reported its first-quarter results, the same portion of revenue had declined 39% over the previous quarter.

The news that cryptocurrency transactions are picking up on the Robinhood app boosted Coinbase Global, Inc COIN on Wednesday, which saw its shares surging over 18% higher. Coinbase is set to print its quarterly results on Aug. 9.

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The Robinhood Chart: Robinhood began trading in a strong and consistent uptrend on June 17, when the stock printed a double bottom at the $6.81 level on that day and the day prior. On Wednesday, Robinhood confirmed the uptrend was still intact by printing another high.

• The most recent higher low in Robinhood’s uptrend was formed on July 26 at $8.37 and the most recent confirmed higher high was printed at the $9.50 level on July 21. Over the coming days, Robinhood will likely retrace to print another higher low and to consolidate.
• A retracement is likely because Robinhood’s relative strength index (RSI) is measuring in at about 69%. When a stock’s RSI reaches or exceeds the 70% level, it becomes overbought, which can be a sell signal for technical traders.
• Traders can watch for Robinhood to print a bearish reversal candlestick, such as a shooting star candlestick or gravestone doji to signal the temporary top is in. Traders not already in a position can then watch for a bullish reversal candlestick to print above the $8.40 level.
• Robinhood has resistance above at $12.77 and $17.08 and support below at $9.94 and $7.71.

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