Shares of Coinbase Global (NASDAQ: COIN) and Robinhood Markets (NASDAQ: HOOD) are capturing significant attention. Both stocks display promising technical patterns indicative of potential breakouts.
Let's delve into the current setup for these two retail favorites and explore why they might be poised for further upside, alongside a snapshot of key fundamentals.
Coinbase Global: Breaking Out of the Downtrend
Coinbase Global, a leading cryptocurrency exchange, has been on an impressive upward trajectory, with shares surging 33% year-to-date. The company reported stellar earnings on February 15, 2024, posting $1.04 earnings per share (EPS), significantly surpassing the consensus estimate of ($0.09). This impressive beat was supported by a 51.6% year-over-year increase in revenue, reaching $953.80 million, well above the forecasted $826.10 million.
Despite the positive earnings and recent bullish momentum in the stock, Coinbase currently holds a "hold" rating from analysts based on 20 ratings, with a consensus price target suggesting a slight downside. However, the technical analysis tells a different story. The stock recently broke out of a bullish wedge downtrend and is now testing its 50-day Simple Moving Average (SMA). Reclaiming and maintaining levels above this critical zone could signal a confirmed breakout, potentially leading to substantial gains.
The company's strong financial performance and the technical breakout make Coinbase a compelling candidate for continued growth in the near term. The current market dynamics and the increasing institutional interest in cryptocurrencies further bolster its prospects.
Robinhood Markets: Hovering Near 52-Week Highs
Robinhood Markets has also been on a tear this year, with its stock up an impressive 55% year-to-date. On May 8, 2024, the company reported its earnings, revealing $0.18 EPS for the quarter, surpassing the consensus estimate of $0.05. Robinhood's revenue soared to $618 million, a 40.1% increase compared to last year's quarter, beating the anticipated $552.74 million.
Analysts have a "hold" rating on Robinhood based on 15 ratings, with a consensus price target that aligns closely with its current trading level. However, the technical picture is notably bullish. The stock is trending above all major moving averages and is consolidating near its 52-week high, just 6% away. This consolidation above rising key moving averages suggests that Robinhood is building a solid base, positioning itself for a potential breakout to new highs.
Institutional and Retail Sentiment
Both Coinbase and Robinhood have substantial institutional backing and remain popular among retail investors. HOOD, a favorite platform for retail traders and a stock to own, has an impressive 93.27% institutional ownership. Similarly, COIN, a stock popular amongst the retail crowd, also has almost 70% institutional ownership. The strong year-to-date performance of both stocks indicates robust market confidence. Additionally, the technical patterns observed in both stocks are often precursors to significant upward movements.
Ready for the Next Leg Higher?
Coinbase and Robinhood exhibit strong bullish formations, impressive year-to-date performance, and resilient upward momentum, presenting compelling opportunities for investors and short-term traders. Coinbase's recent breakout from its bullish wedge and Robinhood's consolidation near its 52-week high suggest that both stocks could be on the verge of significant breakouts.
Investors will want to keep a close eye on these technical levels: For Coinbase, maintaining above the 50-day SMA will be crucial, while for Robinhood, breaking above the consolidation near its 52-week high could trigger the next leg higher. Given their fundamental strengths and technical setups, both stocks appear poised to deliver potential further gains.
