- Robinhood stock price has staged a strong comeback this week.
- The SEC ended the Pattern Day Trader rule this week.
- This means that the company will see more trading revenue this year.
Robinhood stock has staged a strong comeback following months of a freefall that dropped it from a record high of $153 in October to $63 last month. HOOD has now jumped to $90, and this trend may continue, potentially to its all-time high.
Robinhood Stock Surge is Backed by Key Catalysts
The HOOD stock price has numerous catalysts that may boost its performance this year. A major catalyst emerged this week when the Securities and Exchange Commission (SEC) ended the Pattern Day Trader (PDT) rule, which had limited day trading in the US.
It did that by limiting the number of trades that users with less than $25k could open in a week. Ending this rule could lead to increased trading activity, boosting its revenue and profits over time.
Robinhood stock may also benefit if the Senate passes the closely watched CLARITY Act, which aims to simplify the crypto industry. The main hindrance has been on stablecoin yield, which the banking community has rejected.
Passing the act may be bullish for companies in the crypto industry. In addition to offering crypto trading on its platform, Robinhood also offers these services through Bitfarms, which it acquired last year.
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Chances are that Robinhood’s volume continued to rise in the first quarter, as evidenced by the robust trading earnings of top companies like Morgan Stanley, JPMorgan, and Goldman Sachs. Trading volume soared amid the growing volatility because of Donald Trump’s war.
Meanwhile, Robinhood has continued to innovate by launching several products, including its prediction market, credit card, and wealth management solutions, all of which are expected to continue growing. These solutions have helped it to beat its top competitors.
Data shows that Wall Street analysts expect its revenue growth in the next two years to be 17%. The company tends to beat analysts’ estimates, a trend that may continue.
Most importantly, its profitability continues to increase, with earnings per share (EPS) expected to rise to $2.12 this year and $2.63 next year.
HOOD stock is highly undervalued, so management has opted to repurchase it aggressively. It recently launched a $1.5 billion share buyback. Data shows that analysts’ average estimate is that its stock will jump to $103, up from the current $87.
HOOD Stock Price Technical Analysis
The ongoing Robinhood stock surge aligns with our recent prediction. This prediction was based on a falling wedge pattern, which is formed by two descending, converging trendlines. A wedge is one of the most common bullish reversal signs in technical analysis.
The stock also bottomed at the 61.8% Fibonacci Retracement level at $63.5. In most cases, a bullish breakout occurs when an asset falls to this retracement level.
The stock has now moved above the upper boundary of the channeling wedge pattern, while the Relative Strength Index (RSI) and the MACD have continued to rise.
Therefore, the most likely HOOD stock price forecast is bullish, with the next key target being the 23.6% retracement level at $120. This target is about 37% above the current level.
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