In today’s Stock of the Day, let’s take a closer look at Coinbase, which has just flashed a technically significant bullish signal. After a recent correction, the stock printed a bullish engulfing candlestick pattern, highlighted with orange on the chart. This isn’t just any candlestick formation—it’s a strong reversal signal, especially when it appears at the right place. And in this case, it absolutely does.
The bullish engulfing took shape right on a confluence of two important support levels: the yellow horizontal support, which corresponds with the lows from September 2024, and the green uptrend line that has been guiding higher lows for several months now. When multiple technical supports align with a powerful candlestick reversal like this, it significantly boosts the odds of a bounce.
From a trading perspective, this setup suggests a positive short- to mid-term outlook. As long as the price remains above this support zone, sentiment is bullish and buyers are in control. This could open the path to retest previous highs or key resistance zones in the coming days.
On the flip side, if the price were to close a daily candle below the support area, it would invalidate the bullish engulfing and shift sentiment back to negative, triggering a sell signal. However, for now, that scenario looks less probable given the strength of the recent bounce.
In short: Coinbase is showing real signs of a reversal, backed by solid technicals. If you're tracking high-probability bounce setups, this one is definitely worth your watchlist.