Coinbase Global Inc. (NASDAQ: COIN) seems to be poised for a price surge as per its latest charts. The company provides financial infrastructure and technology for the cryptoeconomy in the United States and internationally.
The company offers the primary financial account in the cryptoeconomy for retailers; a marketplace with a pool of liquidity for transacting in crypto assets for institutions; and technology and services that enable ecosystem partners to build crypto-based applications and securely accept crypto assets as payment.
#1 Downtrend Channel: As you can see from the daily chart, the stock has been trading within a downtrend channel for the past few months. This is marked in the daily chart in purple color. Currently, the stock is moving higher from the lower rail of the downtrend channel with high volume. Once the stock breaks out from a downtrend channel, it has the potential to move further up.
#2 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#3 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below –DI and +DI lines. This indicates possible bullishness.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#5 Above Support Area: As you can see from the weekly chart, the stock has currently moved higher from a strong support area. This level is marked as a pink dotted line. This looks like a good area for the stock to move higher.
#6 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart as well, and is also moving higher from oversold levels. This is a possible bullish indication.
#7 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart as well, indicating bullishness.
#8 Oversold RSI: In the weekly chart, the RSI is currently moving higher from oversold levels. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase shares of COIN above the price of around $60.40.
TP: Our target prices are $66 and $71 in the next 3-6 months.
SL: To limit risk, place stop-loss at $57. Note that the stop-loss is on a closing basis.
Our target potential upside is 9% to 18% in the next 3 to 6 months.
For a risk of $3.40, our target rewards are $5.60 and $10.60. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers nearly 2x to 3x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the trend channel with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
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