Robinhood Markets Inc. (HOOD: NASDAQ) is a California-based fintech company that offers commission-free trading through an online discount brokerage platform. In this article, we will delve into an analysis of HOOD’s technical structure using the Elliott Wave Theory to uncover its potential growth prospects.
The main cycle for HOOD began in June 2022 with an impulsive move to the upside, culminating in Wave I by November 2022. Subsequently, the stock underwent a corrective wave II until November 2023. Following this correction, HOOD embarked on a rally within wave III, marked by a 200% increase in price. The peak for this cycle was reached in July 2024 at $24.88, after which the stock experienced a 44% drop in a corrective decline.
The downward movement in wave IV unfolded as a 3-wave ZigZag structure. HOOD retraced to our designated Blue Box area, ranging from $16.67 to $13.81, as illustrated on the daily chart. This Blue Box zone serves as a technical region where we anticipate the correction to conclude, paving the way for the commencement of the next leg to the upside in a proposed wave V.
The anticipated initial response from the lows is likely to be identified as wave ((1)) of V. As a result, HOOD is expected to maintain support above the August low of $13.98 and seek to resume its upward trajectory, targeting new highs within the range of $27.5 to $31.6.
In conclusion, our analysis of HOOD’s technical structure based on the Elliott Wave Theory suggests that the stock is poised for a potential growth phase. The completion of wave IV at the Blue Box area indicates a probable reversal in trend, with wave V expected to propel HOOD to higher price levels. Investors and traders may consider this analysis as they evaluate their strategies and decisions regarding HOOD’s stock.
