Robinhood Price Levels to Watch as Stock Drops After Promotion Causes Revenue Miss

Shares in Robinhood Markets (HOOD) plunged Thursday after the online brokerage missed Wall Street’s quarterly revenue expectations due to a customer promotion program.

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

Robinhood shares were down 17% at around $23.50 in late trading Thursday. Despite the decline, the stock has gained 85% since the start of the year, boosted by a recovery in retail trading volumes and the recent announcement of new products at its HOOD Summit 2024 event.

Below, we break down Robinhood’s chart and use technical analysis to identify important post-earnings price levels to watch out for.

Bullish Momentum Comes to a Halt

Since breaking out above the top trendline of an ascending triangle earlier this month, Robinhood shares continued tracking higher ahead of the company’s quarterly report.

However, that recent bullish price momentum came to a halt Thursday, with the stock giving back three weeks of gains.

Let’s point out three key support levels that investors may be watching and forecast a chart-based upside price target to monitor if the stock makes a recovery.

Watch These Important Support Levels

Firstly, it’s worth keeping an eye on the $24 level, a location on the chart where the shares could attract buying interest near the ascending triangle’s top trendline. This area, which has provided resistance on several occasional between June and September, may now flip into a key support region.

The bulls’ failure to defend this area could see the shares fall to around $22, where the price may encounter support from a horizontal line connecting a range of similar trading levels on the chart from late May to early October.

A more bearish move could trigger a move down to the $20.50 area. Investors may look for entry points near a trendline at this level linking the March peak with a series of price action between May and September.

Upside Price Target to Monitor

If Robinhood shares make a recovery, investors can forecast a potential bullish price target using the measuring principle, a technique that analyzes prior price moves to project future moves.

In this case, we calculate the depth of ascending triangle near its widest section and add that amount to the pattern’s breakout point. For instance, we add $7.50 to $24, which projects a target of $31.50, an area where investors may 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.