When Robinhood printed a first-quarter earnings beat on May 10, the stock became volatile over the two days that followed, closing May 11 6.4% higher before plunging over 9% on May 12.
For the first quarter, Robinhood reported a loss of 57 cents per share, exceeding a consensus estimate of a loss of 61 cents per share. The trading platform also beat on revenues, posting $441 million, which came in under the $424.5-million consensus estimate.
For the second quarter, analysts, on average, estimate Robinhood will report a loss of 2 cents per share on revenues of $475.02 million, according to Zenger News Pro.
Traders and investors will be watching closely to see if Robinhood was able to continue drawing in active users and adding funded accounts.
From a technical analysis perspective, Robinhood’s stock looks bullish heading into the event, having possibly confirmed a new uptrend on Wednesday. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.
The Robinhood Chart: Robinhood was bouncing up from the low-of-day on Wednesday afternoon, working to print a hammer candlestick on the daily chart. A hammer candlestick can indicate the local bottom has occurred and the stock may trade higher the following day.
If Robinhood receives a bullish reaction to its earnings print and rises on Thursday, the hammer candlestick and a new uptrend will be confirmed by the formation of a higher low. The stock’s downtrend was negated on Monday, when Robinhood formed a higher high at the $13.02 mark.
If Robinhood suffers a bearish reaction to the event and falls on Thursday, the stock will lose support at the 21-day exponential moving average and could retrace toward the 50-day simple moving average.
Robinhood has resistance above at $12.77 and at $13.95 and support below at $11.63 and at $10.10.
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