Coinbase Stock: This Bitcoin Leader's Failed Breakout Comes Amid Extended Market – Investor's Business Daily
BREAKING: Warren Buffett Sees No Chance Of ‘Eye-Popping Performance’ In Annual Letter
IPO Stock Of The Week pick and bitcoin leader Coinbase (COIN) triggered a sell rule in recent sessions amid a failed breakout move. Coinbase stock is a recent addition to the IPO Leaders screen.
San Francisco-based Coinbase is the largest U.S. cryptocurrency exchange. It lists about 50 cryptocurrencies for trading, led by bitcoin and ethereum.
On Feb. 15, Coinbase reported earnings of $1.04 per share, improving from a loss of $2.46 per share a year ago and ending a streak of seven consecutive quarterly losses. Total revenue spiked 51% to $953.8 million, marking the exchange’s second consecutive increase after six straight quarters of double-digit declines.
Despite huge earnings growth in the latest quarter, the company’s volatile long-term track record leaves Coinbase stock with a modest 76 Earnings Per Share Rating, according to IBD Stock Checkup. But the company’s annual earnings are expected to grow sharply, up 537% in 2024. FactSet’s analyst consensus is that earnings will ease 7% in 2025.
Following huge price gains in recent months, the IBD Stock Checkup also shows that Coinbase stock has a perfect 99 IBD Composite Rating. The rating blends key fundamental and technical metrics to help investors easily find top stocks.
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On Feb. 16, Coinbase stock spiked above a 187.39 buy point in a cup base, according to IBD MarketSmith chart analysis. But shares have crumbled over the last few days, triggering the 7% sell rule.
That weakness has come even though the price of bitcoin continues to hold near two-year highs. Bitcoin traded around $51,800 Friday midday, per CoinDesk.
A key flaw in the breakout was the lagging relative strength line. The RS line should hit a new high on the breakout day, but it failed to do so. That was a clue that the breakout wasn’t as strong as needed. Shares failed to close above their buy point on the breakout day, another sign of mounting risk.
The failed breakout is a reminder that stock market gains are stretched.
Despite Thursday’s market rally, IBD’s Big Picture commented that “investors should be hesitant to add much exposure at these levels, especially in AI stocks.” IBD maintained its recommended exposure level at 60%-80%.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
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2/22/2024 Catch up on the latest cryptocurrency prices and news.
2/22/2024 Catch up on the latest cryptocurrency prices and news.
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Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.
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