Robinhood Markets (HOOD) reported mixed quarterly numbers Wednesday evening and the shares gapped lower this Thursday. Despite this early weakness, the stock is staging a little bit of an intraday rebound and that has got us looking closer at the charts and indicators.
In the daily bar chart of HOOD, below, I can see that share prices moved sharply lower in early trading Thursday and approached the rising 50-day moving average line. Prices have improved and have filled a big chunk of the early downside price gap. It is a long way until the closing bell so anything can happen.
Trading volume expanded from June to early July and then declined so I find it hard to say if traders are staying put or heading out the door. The On-Balance-Volume (OBV) line made a strong move up from May and then stalled in July. The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line but correcting.
In the weekly Japanese candlestick chart of HOOD, below, the "bigger picture" is a potential base pattern. Thursday's price weakness may turn out to be just a short-lived pullback into the base or basically a buying opportunity. Prices are trading above the rising 40-week moving average line.
The weekly OBV line has been improving for some time now plus the MACD oscillator is above the zero line.
In this daily Point and Figure chart of HOOD, below, I can get a view without a price gap that we may be looking at a pullback within a base pattern. A price target of $18 is shown.
In this weekly Point and Figure chart of HOOD, below, I can see the same bottom pattern and that the shares reached a price target in the $13 area.
Bottom-line strategy: I
recommended the long side of HOOD in my May 11 review, writing that "Strength above the April highs will be a significant clue that prices can go higher. Trade HOOD from the long side."
Traders who are still long should hold. Traders looking to go long or add to longs could purchase HOOD on Thursday's weakness.
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