Coinbase Global Inc (NASDAQ:COIN) stock's fall from its July 18 record peak of $444.64 was made worse by an August 1 post-earnings bear gap of 16.7%. For those betting on a short-term comeback, however, shares of the cryptocurrency exchange are flashing a historically bullish signal.
Per Schaeffer's Senior Quantitative Analyst Rocky White, COIN is within 0.75 of the 80-day trendline's 20-day average true range (ATR), after spending at least 80% of the last 10 days and 80% of the last two months above it. Over the past three years, six similar signals have occurred, after which the equity was higher one month later 83% of the time, averaging a 13.1% gain. A move of similar magnitude from the stock's current perch of $301.23 would put it at $340.69.
COIN's 14-day relative strength index (RSI) of 17 sits firmly in "oversold" territory, which typically precedes a short-term bounce. Furthermore, short interest currently represents 6.4% of the stock's available float, leaving plenty for a short covering potential.
An unwinding of pessimism amongst options traders could provide tailwinds as well. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), COIN's 10-day put/call volume ratio of 0.64 ranks higher than 98% of readings from the past year. So while calls are still winning out on an absolute basis, put traders have been chiming in at a much faster-than-usual rate.
