Here’s your (potential) trade on $HOOD – October 31, 2024
Dan Fitzpatrick here at StockMarketMentor.com. We’re going to come back to the Hood ( NASDAQ: HOOD ), but for now, I want to look at the S&P ( NYSEARCA: SPY ).
Note the 50-day moving average, look at the 50-day moving average. It’s testing here as well. The DIA ( NYSEARCA: DIA ) is here and not doing so well, but there will probably be some recovery tomorrow. We’re seeing a lot of stocks come back to test their 50-day. One of them is the Hood ( NASDAQ: HOOD ) here, Robinhood ( NASDAQ: HOOD ).
This is the pattern that I liked, I mentioned this on Charles Payne’s show. I like this long base, and now the stock’s climbing out to the upside. I don’t like this company, I think their CEO is a scumbag. He’s not going to be offended by that because he doesn’t know me. I don’t like that guy, I don’t like the company, but I like this chart, and that’s all I care about. I’m not looking for friends.
As I look at the daily chart, though, they reported earnings, and actually had really good numbers in their Cryptocurrency area, trading Crypto. But they fell short in other areas, that’s why the stock’s down. I’m looking at the 50 as a possible buy point here. What I would suggest doing is, look at this here, 23.40, 23.50, we’ll say somewhere around here. I’d say this is where your current support is.
This volume-weighted average price is anchored to today’s trading, so it shows you the average price right now for today, which is about $24.00. This stock is clear below there, which means, everybody that’s bought here, which is most people, they’re upside down, this is average price by volume.
You could say, well, wait a minute, if everybody’s bought down here, how come this is only up here? It’s because all the volume occurred back here, so everybody’s a loser now. I would look at this level about $24.00 or so, as a line in the sand. And the way I’d trade this is if you wanted to trade this on a rebound, and I have no idea whether the stock’s going to rebound, and if it does, how far?
I would just say this, the close here on regular hours was 23.49, so if the stock gaps down tomorrow, all the better. Your buy point is when the stock runs above 23.50. It’s pretty easy, just a slingshot, a gap down, and then a move back above today’s closing price, 23.49, and the intraday low, 23.15. So you’d be buying just above today’s close, and keep your stop just a little bit below today’s intraday low.
That gives you a really, really tight, tight trade. You’re not risking a lot of money, and then you can capitalize on this and take advantage of any upside move that it has. Whether it’s going to do that, I don’t know but that’s how I would frame a trade. And by the way, if it doesn’t do that, then stay away from the stock. There’s always another day, it doesn’t have to be the day that you lose money.
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