- Robinhood stock price has formed a death cross and a bearish flag pattern.
- These technicals suggest that the stock may drop sharply in the near term.
- The only hope is that its fundamentals are strong, with its revenue growth continuing.
Robinhood stock price has gone nowhere in the last month despite some notable catalysts like Cathie Wood’s investment and a surge in its banking deposits. It has remained inside a narrow channel and formed a risky pattern that points to a bearish breakdown, potentially to $50.
Robinhood Stock Price Has Formed Risky Chart Patterns
The daily chart shows that the HOOD stock price has crashed over the past few months, falling from an all-time high of $157 in October last year to its current price of $78.
A closer look suggests the stock may be at risk of a strong bearish breakdown in the near term. For example, it formed a death cross pattern on February 26, when the 50-day and 200-day Exponential Moving Averages (EMAs) crossed.
The stock has also tumbled below the important support level at $20, its lowest swing on November 21st last year. This price also coincided with the neckline of the slanted triple-top pattern shown in black.
Robinhood’s share price is forming a bearish flag pattern. This pattern consists of two key parts: a vertical line resembling a flagpole and a horizontal channel. It normally resembles an upside-down hoisted flag.
Therefore, the stock will likely have a strong bearish breakout in the foreseeable future. If this happens, the next key target to watch will be $50, about 35% below the current level.
READ MORE: Ripple Labs to Get Australia License as XRP Price Shows Bottoming Signs
Strong Fundamentals May Offset the Losses
Robinhood’s bearish outlook is based on its weak technicals. On the other hand, its fundamentals may help to prevent a steeper dive.
The most recent results revealed that its business was doing well on most metrics. Its customer count, revenue, and profits soared by double digits. The only blemish was its crypto revenue, which dropped sharply as cryptocurrency prices tumbled.
These numbers revealed that its total platform assets rose to $325 billion, while its revenue soared to $4.4 billion from $2.9 billion a year earlier. This growth was driven by strong activity, as the number of funded customers rose by 2.2 million.
The company has expanded its business into other areas, helping it to diversify its revenue over time. For example, it has launched a prediction marketplace, capitalizing on the growing industry. It is also offering its tokenized stocks to European clients, a move that may see it expand the solution to other countries.
The company is also offering banking solutions through a partnership with Coastal Community Bank. In an X post on Tuesday, Vlad Tenev, the CEO, noted that the service had accumulated over $1 billion in deposits from 65k customers a few months after launch.
Robinhood stock has also become a bargain compared to where it was a few months ago. It now trades with a forward PE ratio ratio of 30, lower than the five-year average of 36. It has a net income margin of 42% and a forward revenue growth of 51%, giving it a Rule-of-40 multiple of 93%.
Another possible catalyst for HOOD’s stock price is a potential crypto market rally if the war in Iran ends. Donald Trump has already hinted that he wants a short war, which explains why crude oil prices have retreated in the past few days.
READ MORE: Hyperliquid’s HYPE Price Jumps as Top Expert Sees a 330% Surge
