Coinbase (COIN) – Get the Coinbase Global Inc. report The stock soared on Thursday as the crypto specialist said it would partner with asset management giant BlackRock (BLK) – Get the BlackRock Inc. report.
Shares jumped 44% in early trading and have since retreated, about 10% to near $89.
This follows yesterday’s 20% gain and Tuesday’s 7.2% rally. With such profits, Cathie Wood & Co. she must be feeling a bit disappointed.
Wood’s Ark Invest dumped more than 1.4 million shares at about $53. This is after the sport based on the average cost close $255 per share — so about an 80% loss at the time of the sale. The sales also came after reports of an SEC investigation into the company.
At today’s high of $116.30 this morning, the stock has more than doubled Ark’s selling price. While the rally looks like it will struggle to maintain its momentum, such a sharp, sudden rally should still sting for those who just stopped.
Now investors are wondering if Coinbase can continue to rally or if today’s move will signal a short-term top in the stock.
Coinbase Stock Trading
I love it when an old trend line or key level I’ve drawn on a chart comes back months of play.
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In this case, I was drawn to the $113.32 breakdown level on the chart from late April and early May.
I also had the downtrend sign noted on the chart (blue line), which followed the lower lows from the first quarter.
While this is hardly prophetic, seeing a stock’s gap rise and rise to these levels and then fade sharply signifies the help that technical analysis can provide traders.
That’s not to say fundamentals don’t play a role — they do — but knowing how to combine the two can pay big dividends.
With today’s action, Coinbase stock has faded sharply from a key level on the charts. This is bearish.
If the price action had been up, the stock would have recovered the previous resistance and used it as support to push even higher. The stock has actually moved significantly higher, so getting a bit inflated makes sense. But bulls would like to see it hold above the psychologically relevant $100 level, as well as the 21-week moving average.
If it continues to fade, bulls will want to see it hold the $79 to $82 range. This was the previous resistance and marks the gap filling level from today’s session. If this area holds, the bulls could have a potential long setup to work with.
If the stock misses the 10-day moving average, the 21-day and 50-day stocks could play in the low $60s.
On the upside, a move back above $100 puts the $113 to $116 range in play, followed by the weekly VWAP measure near $130.