Crypto exchange stock Coinbase Global (COIN) has struggled on the charts in recent weeks, losing 17.2% over the last month of trading. The equity is also far removed from its Dec. 6, four-year high of $349.75. However, COIN’s recent pullback could be short-lived, as the equity approaches a historically bullish trendline.
Per data from Senior Quantitative Analyst Rocky White, Coinbase stock is within one standard deviation of its 80-day moving average, after spending a lengthy amount of time above this trendline. The security saw four similar signals in the past three years, after which it was higher one month later every time, averaging an outsized 23.4% gain. History could already be repeating itself, as COIN was last seen 4.5% higher at $259.50, on track to snap a four-day losing streak. A move of similar magnitude from its current perch would put the shares at $320.22.
Despite its 69.5% year-over-year lead, analysts are still bearish on Coinbase stock. Of the 23 covering brokerages, 13 recommend a “hold,” and one rates the security a “strong sell.” Short-term options traders are pessimistic as well, per the security’s Schaeffer’s put/call open interest ratio (SOIR) of 0.79, which stands higher than 80% of readings from the past 12 months. Should this pessimism unwind, it could help push COIN higher.
Now could be a good time to take advantage of the Coinbase stock’s dip with options, as it’s exceeded options traders’ volatility expectations over the past 12 months. This is according to COIN’s elevated Schaeffer’s Volatility Scorecard (SVS) tally of 82 out of 100.
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