Robinhood price levels to watch if stock drops after promotion causes earnings miss

Key Takeaways

Shares of Robinhood tumbled Thursday after the online brokerage firm missed Wall Street’s quarterly revenue expectations due to a customer promotional program.
The stock broke out above the upper trendline of an ascending triangle earlier this month, although the recent bullish price momentum stalled after the company’s third-quarter results.
Investors should pay attention to key support levels on the Robinhood chart around $24, $22, and $20.50.
The measurement principle, which calculates the depth of an ascending triangle near its widest part and adds that amount to the pattern’s breakout point, predicts an upside target for the stock of $31.50.

Stocks in Robinhood Markets (CAP) plummeted Thursday after the online brokerage missed Wall Street’s quarterly results gain expectations resulting from a customer promotional program.

The company, which posted third-quarter revenue of $637 million, below the consensus estimate of $653.1 million from analysts polled by Visible Alpha, said revenues fell by $27 million in the period “due to customer payments on transfers and deposits.”

Robinhood shares fell 17% to about $23.50 in late trading Thursday. Despite the decline, the stock is up 85% since the start of the year, boosted by a recovery in retail volumes and the recent announcement of new products during the HOOD Summit 2024 event.

Below we provide an overview of the diagram and how to use Robinhood technical analysis to identify key post-earnings price levels to watch out for.

The bullish momentum is coming to a halt

Since breaking above the upper trendline of a ascending triangle Earlier this month, Robinhood shares continued to rise ahead of the company’s quarterly earnings report.

However, that recent bullish price momentum came to a halt on Thursday, with shares posting three weeks of gains.

Let’s mention three key words support levels that investors may be monitoring and predicting a chart-based rise price target to check if the stock is recovering.

Check out these key support levels

First, it’s worth keeping an eye on the $24 level, a location on the chart where the stock could attract buying interest near the upper trendline of the ascending triangle. This area, which has provided resistance which occurs occasionally between June and September, can now develop into a major support region.

If the bulls fail to defend this area, the stock could fall to around $22, with the price seeing support from a horizontal line connects a range of similar trading levels on the chart from late May to early October.

A more bearish move could see a decline towards the $20.50 area. Investors can start looking access points near a trend line at this level connecting the March peak to a range of price promotion between May and September.

Upward price target to monitor

If Robinhood stock rebounds, investors can predict a potentially bullish price target using the measuring principlea technique that analyzes past price movements to project future movements.

In this case, we calculate the depth of the ascending triangle near the widest part and add that amount to the breakout point of the pattern. For example, we add $7.50 to $24, which projects a target of $31.50, an area where investors might decide to lock in profits.

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As of the date this article was written, the author does not own any of the above securities.