Here’s my take on Coinbase $COIN – March 22, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to talk about Coinbase ( NASDAQ: COIN ) today.
I was CNBC talking about this stock, just from a purely technical standpoint. Spoiler alert, my price started here at 430.00, and that is just simply a new all-time high. The way this stock has been going, this last 92 percent of its market cap from the initial offering, the first day when it hit 430.00 within change anyway, from that down to here.
During that time, of course, this was when Bitcoin was really, really high, and then really, really low. This thing really got crushed, but then as Bitcoin recovered it’s like, oh my God, could things get any worse, I don’t think they can. Then that’s time for stocks to start moving up.
That’s what happened here; there are earnings issues too, these are good issues because this company was hemorrhaging money. And then the bleeding started to wane a little bit, but it was still leaky, like a leaky wound. And then suddenly last quarter, the fourth quarter of 2023, I think they printed something like their last earnings report, they printed a buck four in profits, versus the prior quarter of a loss of one penny. They had a big, big turnaround.
I may have the dates wrong, but the bottom line is, they put up a monster number. And now analysts are starting to raise the price targets on this. You know what’s going on with Bitcoin, it’s going up and down. First, it’s, oh, it’s a new high, 72,000, 73,000, to the moon, and then it’s down. Oh, now it’s back down to 65,000, it’s tulips, all you idiots, you are going to lose all your money.
That’s just the way a currency like this goes, it’s a new asset class, basically, and it’s going to be really, really volatile. But generally speaking, the trend is higher, and so we are seeing this with Coinbase ( NASDAQ: COIN ). What I want to show you real quick here is this reversal. This is a classic head and shoulder pattern, though, you can draw it in a couple of different ways.
First of all, we get lower lows right here; this one, and then this one, and then the next one is the higher low, right here. And so I’m looking at this as this is the left shoulder, this is the head, and then this is the right shoulder, a higher low.
But here’s the deal, where are you going to draw the lines? What you want to do is, draw the line in between the two peaks that are on either side of these circles. So left shoulder, head, what was the highest price in between these? That would be this right here. And then the head, right shoulder, what was the highest in between these? That would be right here.
So if this is the correct head and shoulder pattern, then this would be where the breakout is. Even if we do it this way, it works. Because you’ve got the breakout above this neckline here, and then what’s called the throwback, where the price goes up, and then it comes down and actually tests the neckline. And that test was passed, and then, of course, it’s off to the races.
The other way that you could draw it, and it makes more sense to me is, I look at this as this highest high, which makes this a complex thing here. You could even say, well, then that means that this is the right shoulder. So at some point, you’ve got to say, you know what? I think this thing is just deformed. It’s got a little Quasimodo action going, maybe it’s got a couple of right shoulders.
But the bottom line is, whichever way you’re doing it, if you’re doing it this way, or this way, the resistance line is broken. And again, either way, you get a breakout and then a retest of this. So prior resistance, once broken, becomes support. Do it back here, prior resistance, once broken, becomes support.
So either way you want to look at this, Coinbase ( NASDAQ: COIN ) has done a major, major reversal here. You can look at it and say, well duh, it’s obvious. Right, I agree with you. But to me, what else is obvious is, if you look at Bitcoin, Ethereum, Solana, the big three, if you look at what’s going on there, and this is the bank that a lot of people need to go through. It’s the exchange of preference, so to speak.
So as crypto heats up, I think, you are going to see this stock come closer and closer to the 430.00 mark. And I suggest that you be there.
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