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Crypto Stock Posing Attractive Entry Point for Bulls
Coinbase Global Inc (NASDAQ:COIN) stock's fall from its July 18 record peak of $444.64 was made worse by an August 1 post-earnings bear gap of 16.7%. For those betting on a short-term comeback, however, shares of the cryptocurrency exchange are flashing a historically bullish signal.
Per Schaeffer's Senior Quantitative Analyst, COIN is within 0.75 of the 80-day trendline's 20-day average true range (ATR), after spending at least 80% of the last 10 days and 80% of the last two months above it. Over the past three years, six similar signals have occurred, after which the equity was higher one month later 83% of the time, averaging a 13.1% gain. A move of similar magnitude from the stock's current perch of $301.23 would put it at $340.69.
COIN's 14-day relative strength index (RSI) of 17 sits firmly in "oversold" territory, which typically precedes a short-term bounce. Furthermore, short interest currently represents 6.4% of the stock's available float, leaving plenty for a short covering potential.
An unwinding of pessimism amongst options traders could provide tailwinds as well. At the International Securities Exchange (ISE), COIN's 10-day put/call volume ratio of 0.64 ranks higher than 98% of readings from the past year. So while calls are still winning out on an absolute basis, put traders have been chiming in at a much faster-than-usual rate.
This article has been published in schaeffersresearch.com via Yahoo News.
