Monthly Archives: July 2021

Coinbase: Price And Time Are In Alignment

The daily chart of Coinbase (COIN) may have formed a double bottom. Increased buying pressure after a period of consolidation suggests the current path of least resistance is higher.

The May and June lows first stood out to me on the Coinbase chart. There was selling going into the May low and there is buying coming off the June low. The buying is being confirmed by the positive reading on the Chaikin money flow indicator. These two lows mark a period of consolidation on the chart that was preceded by a downtrend. In fact, the cycle tool tells us that both the downtrend period nd the consolidation period were exactly 24 trading days. If we assume that the stock should enter a rally period now, then it should last another cycle or 24 trading days. This projects another high in the stock price around August 27th.

This is a very neat and clean interprutation of the chart. A number of indications line up perfectly. I suspect the end result will not play out as picture perfectly as I have presented it. The chart was picked to illustrate the classic behavior of stocks moving between rally or downtrend and periods of consolidation. There is not enough time on the chart for the cycle tool to have that much relevance. I pointed it out as a coincident indication. The positive money flow reading and the realtive strength indicator both moving over their centerlines are more meaningful. They represent positive price and money flow.

Let’s see how this chart action plays out and what we can learn from it.