This is Scott and this is StockMarketMentor’s Chart of the Day. I want to take a look at Coinbase ( NASDAQ: COIN ).

A year ago we were looking at this inverse head and shoulders pattern on Coinbase ( NASDAQ: COIN ). It definitely played out to the upside with a massive move off these lows, trending nicely, though choppy up and back to some of the previous highs from when it launched its IPO in 2021

Tonight, Coinbase ( NASDAQ: COIN ) announced earnings, and it looks like they beat earnings but the stock is actually down after hours. If I turn on After Hours here you can see the stock has actually been whipping around. At first, it ran up, then it ran down, and now it is just all around.

My understanding is, that it was a pretty positive earnings report, a double beat on earnings. And of course, if we continue with a potential Bitcoin bull market the outlook is positive for https://optionmarketmentor.com/stockanalysis.html?ticker=coin ( NASDAQ: COIN ), but the stock is down after hours.

Because they had positive earnings, but it was a negative reaction, that leads me to believe that Coinbase ( NASDAQ: COIN ) could offer an entry tomorrow if it does continue to open lower. If I look at this chart right here, and I see it is just under the 50-day moving average, I can see a pretty clear downward-sloping trendline.

What I would want to see from Coinbase ( NASDAQ: COIN ) is a lower open tomorrow. Let’s say it opens where it is right now, right around 225.00, so that would be around here. If this can open here and do this, I think that could actually offer a pretty good entry with confidence that it’s not going to come back down to that low 190.00 area here because it’s a positive reaction on earnings.

That’s what I would look for here on Coinbase ( NASDAQ: COIN ). I want to see a higher move and ideally get above that 50-day moving average. If it can break above this clear downward sloping trendline, which, if I flip back to the hourly chart, I’ll turn off After Hours, that would be a break of this hourly downtrend.

So we have a potential downtrend breakage look tomorrow, coming off of earnings and that positive report. That’s an entry I think could work on Coinbase ( NASDAQ: COIN ). You probably want to have a stop loss, maybe down here around 193.00, or even the low of wherever it opens tomorrow.

You are going to want to see that reversal to the upside. If it opens and pukes, maybe it does this, you probably don’t want to hold it, you probably want to step aside and let the dust settle. This breakout to the upside, after a lower open on positive earnings, is a setup that I’ve seen play out over and over again in the market. So that is what I am watching for tomorrow on Coinbase ( NASDAQ: COIN ).