Technical Analysis: Robinhood Markets, Inc. (HOOD)
Robinhood Markets, Inc. (HOOD) is currently trading at $19.95, up 11.45% from the previous close. This significant movement indicates strong bullish momentum. Below is an in-depth technical analysis to provide actionable insights.
Oscillators
Relative Strength Index (RSI): At 63.31, the RSI is in the neutral zone but approaching the overbought territory. A further move towards 70 could indicate overbought conditions, suggesting a potential reversal or consolidation.
Stochastic %K: With a value of 70.79, it also signals neutral, but close to overbought levels. This corroborates the RSI, hinting at potential overbought conditions soon.
Commodity Channel Index (CCI): At 254.93, the CCI is significantly above 100, indicating strong buying pressure and a potential overbought condition.
MACD Level (12, 26): Positive at 0.24 with a 'Buy' signal, suggesting bullish momentum is still strong.
Moving Averages
All key moving averages, including the 10-day, 20-day, 50-day, 100-day, and 200-day SMAs and EMAs, indicate a 'Buy' signal. The price is currently above these averages, reinforcing the bullish outlook.
EMA (10): 18.06 (Buy)
SMA (20): 17.58 (Buy)
EMA (50): 17.20 (Buy)
SMA (200): 12.68 (Buy)
Pivots
Pivot Point (P): 17.70
Support Levels: S1 at 15.25, S2 at 14.01
Resistance Levels: R1 at 18.94, R2 at 21.39
Valuation Ratios
Price to Sales Ratio: 6.56, relatively high, indicating the market expects high future growth.
Price to Cash Flow Ratio: 14.33, suggesting the stock is somewhat overvalued based on current cash flows.
Profitability Ratios
Return on Assets (ROA): -5.85%, indicating inefficiency in asset utilization.
Return on Equity (ROE): -17.93%, reflecting negative returns on shareholder equity.
Chart Patterns and Price Action
The latest candlestick shows a breakout above the upper resistance line of a consolidation pattern, indicating a continuation of the upward trend. The volume spike supports this breakout, suggesting strong buyer interest.
Speculative Price Targets
Short Term (1-2 weeks): The immediate target is $21.39, aligning with the R2 resistance level. If bullish momentum continues, this target could be reached.
Medium Term (1-2 months): The next significant target is $25.08 (R3), contingent on sustained bullish sentiment and favorable market conditions.
Trading Strategy
Long Position: Enter at the current price level ($19.95). Set a stop loss at $18.00 to mitigate downside risk. Target price: $21.39 (short term), $25.08 (medium term).
Short Position: Consider shorting if the price fails to hold above $18.00, with a stop loss at $20.00. Target price: $15.25 (S1), aligning with the first support level.
Conclusion
Based on the technical indicators, moving averages, and overall market sentiment, Robinhood Markets, Inc. shows strong bullish potential in the short to medium term. However, traders should monitor for any signs of overbought conditions and be prepared to adjust their positions accordingly.
Oscillators
Relative Strength Index (RSI): At 63.31, the RSI is in the neutral zone but approaching the overbought territory. A further move towards 70 could indicate overbought conditions, suggesting a potential reversal or consolidation.
Stochastic %K: With a value of 70.79, it also signals neutral, but close to overbought levels. This corroborates the RSI, hinting at potential overbought conditions soon.
Commodity Channel Index (CCI): At 254.93, the CCI is significantly above 100, indicating strong buying pressure and a potential overbought condition.
MACD Level (12, 26): Positive at 0.24 with a 'Buy' signal, suggesting bullish momentum is still strong.
Moving Averages
All key moving averages, including the 10-day, 20-day, 50-day, 100-day, and 200-day SMAs and EMAs, indicate a 'Buy' signal. The price is currently above these averages, reinforcing the bullish outlook.
EMA (10): 18.06 (Buy)
SMA (20): 17.58 (Buy)
EMA (50): 17.20 (Buy)
SMA (200): 12.68 (Buy)
Pivots
Pivot Point (P): 17.70
Support Levels: S1 at 15.25, S2 at 14.01
Resistance Levels: R1 at 18.94, R2 at 21.39
Valuation Ratios
Price to Sales Ratio: 6.56, relatively high, indicating the market expects high future growth.
Price to Cash Flow Ratio: 14.33, suggesting the stock is somewhat overvalued based on current cash flows.
Profitability Ratios
Return on Assets (ROA): -5.85%, indicating inefficiency in asset utilization.
Return on Equity (ROE): -17.93%, reflecting negative returns on shareholder equity.
Chart Patterns and Price Action
The latest candlestick shows a breakout above the upper resistance line of a consolidation pattern, indicating a continuation of the upward trend. The volume spike supports this breakout, suggesting strong buyer interest.
Speculative Price Targets
Short Term (1-2 weeks): The immediate target is $21.39, aligning with the R2 resistance level. If bullish momentum continues, this target could be reached.
Medium Term (1-2 months): The next significant target is $25.08 (R3), contingent on sustained bullish sentiment and favorable market conditions.
Trading Strategy
Long Position: Enter at the current price level ($19.95). Set a stop loss at $18.00 to mitigate downside risk. Target price: $21.39 (short term), $25.08 (medium term).
Short Position: Consider shorting if the price fails to hold above $18.00, with a stop loss at $20.00. Target price: $15.25 (S1), aligning with the first support level.
Conclusion
Based on the technical indicators, moving averages, and overall market sentiment, Robinhood Markets, Inc. shows strong bullish potential in the short to medium term. However, traders should monitor for any signs of overbought conditions and be prepared to adjust their positions accordingly.