Robinhood Markets, Inc. HOOD was trading slightly lower on Wednesday as the company heads for its third quarter results after closing.
When Robinhood printed an EPS rhythm in the second trimester On August 2, the stock jumped almost 10% the next day before peaking at $11.35 on August 4. Between then and Wednesday, Robinhood traded in a slight uptrend on the weekly chart.
For the second quarter, Robinhood posted a loss of 34 cents per share, beating a consensus estimate of a loss of 37 cents per share.
For the third quarter, analysts on average estimate Robinhood will post a loss of 31 cents per share on revenue of $355.27 million.
On October 12, Morgan Stanley analyst Michael Cyprys maintained an equal weight rating on Robinhood and raised the price target from $11 to $12.
Cathy Wood-led ARK Investment Management has loaded shares of Robinhood over the past week, most recently adding 30,000 shares on two different ETFs.
From a technical analysis perspective, Robinhood’s stock looks bullish heading into the event, having settled into a possible bull flag pattern near the upper trendline of an uptrend channel. It should be noted that holding stocks or options on a profit impression is akin to gambling, as stocks can react bullish to a shortfall and bearish to a beat in profits.
The Robinhood chart: Robinhood started trading in a rising channel pattern on July 28th. Over the past three trading days, the stock attempted to break bullishly from the pattern, but was nasty and thrown off the upper ascending trendline.
- The rise that occurred between October 21 and 31, coupled with the slight decline in prices over the past two trading days, set Robinhood into a possible bull flag pattern, with the flag forming just below the line upper trend of the channel. The measured move from a flag break is around 30%, indicating that Robinhood could surge towards $15.
- Although Robinhood reversed its downward trend on October 26 by breaking above the low high of $11.02 from October 14, the stock has yet to confirm that an uptrend is intact. If Robinhood receives a bullish reaction after earnings, Wednesday’s daily low will mark a higher low and confirm an uptrend.
- If the stock experiences a bearish earnings reaction and falls below the 8-day EMA, the bull flag pattern will be undone. If this happens and Robinhood continues to decline over the next few trading days, the stock may find support at the lower ascending trendline of the channel.
- Robinhood has resistance above $12.77 and $13.95 and support below at $11.63 and $10.10.
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