Coinbase Global (COIN) gapped lower on Wednesday's opening. With no love from Wall Street following its earnings miss this week, COIN saw a price-target cut and a downgrade from two different analysts. Could nimble traders flip this bad news into an opportunity? Let's check the charts and indicators.
In this daily bar chart of COIN, below, we can see that prices have been very weak over the past six to seven months. Prices are in a steep downtrend and are extended on the downside and trade for less than half of the level of the 200-day moving average line.
The slopes of both the 50-day average and the 200-day average are negative. The trading volume has surged sharply higher in recent days as traders and investors appear to be in a rush to sell. The On-Balance-Volume (OBV) line shows weakness from November and recently a sharp move lower as selling has increased. The Moving Average Convergence Divergence (MACD) oscillator is bearish and pointed lower.
In this weekly Japanese candlestick chart of COIN, below, we see a lot of red or bearish candles. No bottom reversal pattern and no lower shadows. We have only a few months of the 40-week moving average line but it has a negative slope. The weekly OBV line is pointed down and the MACD oscillator is bearish with no signs of narrowing.
In this daily Point and Figure chart of COIN, below, we tried many ways to torture the data to come up with a reasonable price target. All attempts continued to result in a $0 price target.
Bottom line strategy: Sometimes downtrends offer relief rallies or bounces that can be tradable opportunities for nimble traders. Unfortunately, the charts and indicators of COIN are not that kind. Avoid the long side of COIN.
