Back on September 7 we looked at the charts of Coinbase ( COIN) and wrote that "Aggressive traders could go long COIN at $275 or better...The $339 area is our initial price objective."
COIN traded below our suggested stop level and then in early October began a sharp rally that briefly passed our $339 price target just the other day. COIN is now trading below our target. Let's see how we should treat this decline.
In this daily bar chart of COIN, below, we can see that prices retreated to the rising 20-day moving average line. The 50-day moving average has a positive slope. The On-Balance-Volume (OBV) is strong but could make a high today. The Moving Average Convergence Divergence (MACD) oscillator is still pointed upwards but has been narrowing towards a possible crossover.
In this daily Point and Figure chart of COIN, below, we can see that the software is now showing a downside price target in the $275 area.
Bottom line strategy: I assume and hope that traders nailed down some or all their profits around $339 - our price target. COIN looks like it will pull back further, maybe to the $275 area. Stand aside for now.
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Rather than get burned by issues with suddenly inflated prices that eventually could crash back to earth, go with tried-and true-names in technology development.
The charts indicate that the shares of the semiconductor maker are likely to trade sideways for a while even as it gains an analyst's buy recommendation.
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