Robinhood Stock Surges As Stock Develops Consistent Trend: A Technical Analysis

Robinhood Markets, Inc HOOD was spiking up over 7% on Tuesday after closing Monday’s session up almost 4% after JJMP Securities analyst Devin Ryan weighed in on the stock.

The analyst reiterated a Market Perform rating, raised the price target and maintained a $25 price target.

The move higher on Tuesday, like on Friday and Monday, was taking place on higher-than-average volume. Volume is the total number of shares traded in a security within a specific period of time. It’s a momentum indicator used by technical traders to gauge overall interest and sentiment in a stock. Volume is also used as an indicator to confirm a trend or trend change.

When bullish trading volume increases, the share price of the stock usually moves higher whereas increasing bearish volume, when a stock is in a downtrend, usually pushes the price lower. In contrast, lower-than-average trading volume usually indicates consolidation which results in the stock trading sideways.

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The Robinhood Chart: Robinhood began to stage a massive reversal on May 17, when the stock formed a bullish double-bottom pattern at the $8.31 mark on that day and the trading day prior. Robinhood then started to trade in a steep uptrend, rising over 43% by Tuesday afternoon.

• The stock is trading in a confirmed uptrend, making a fairly consistent series of higher highs and higher lows. Robinhood’s most recent higher high was formed on July 3 at $10.80 and the most recent higher low was printed at the $10.20 mark on July 7.
• Eventually, Robinhood will need to retrace to form another higher low, especially because the recent uptick has caused the stock’s relative strength index (RSI) to surge to about 78%. When that happens, it could give bullish traders a solid entry point.
• Bearish traders want to wait for Robinhood to indicate the top has occurred by watching for the stock to form a bearish reversal candlestick, such as a doji or shooting star candlestick. When that happens, Robinhood could retrace lower for at least a short period of time.
• Robinhood has resistance above at $12.77 and $13.95 and support below at $11.63 and $10.10.

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