This Crypto Kingpin Is Breaking Out Fast

Right now, it’s hard to find a pocket in the market that is any hotter than those stocks that are tied into the Crypto business. Currently, this industry is benefitting mightily from a more friendly regulatory environment. Of course, this has broadly been a nice tailwind to many cryptocurrencies themselves, but I’m focusing specifically on the Crypto stocks today. There are several companies whose business is heavily engaged in Crypto and are now seeing powerful price action as the Wall St. Bulls pile in. However, one of these stocks has caught my attention above all the rest.

This stock has quite a broad exposure to Crypto in general as their primary business entails offering an exchange on which various cryptocurrencies can be traded. You’re probably familiar with them, but if not, the stock I’m referencing is Coinbase Global, Inc., symbol: (COIN). COIN is a crucial cog in the cryptocurrency ecosystem as they offer the largest U.S. based exchange as well as their custody services that they provide to institutional clients. As Wall St. has rapidly adopted crypto over the past few years, this has boosted COIN’s business as they are helping to facilitate the increased institutional crypto transactions. Not only is this pumping up the company’s financial results, but it’s also showing up on the charts in the price action too. Take a look at this stock, it’s been going gangbusters recently!

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As you can see clearly see, COIN shares in recent weeks have taken off like a rocket ship! Just this week COIN has set several new 52-Week Highs which is a bullish sign within itself. However, there is another POWERFUL technical ‘Buy’ signal in this chart. I’ve circled where the 21-day EMA crossed above the 63-day EMA, just as the stock was beginning to catch a bid and put together a pattern of constructive trading. Since that ‘Buy’ signal originated, just a month ago, COIN shares have rallied more than 50%! Talk about a timely entry signal from this trend following system. Now granted, COIN shares by most measures look very stretched here in the short-term and are highly likely to experience a slight retracement. However, COIN’s breakout that we are witnessing is significant and I’ll be watching for a pullback in this name to get a better entry for a trade.

Once COIN shares do pullback and I spot an opportunity for a more favorable entry point, I know exactly the type of trade that I’d look to place on this name. Due to the more elevated volatility in COIN over the past month, this is going to translate to richer option premiums for the stock. By this, I mean that COIN’s options are going to be carrying more time value than perhaps they would at another time. I can play this to my advantage though, if I select the proper type of setup to trade this move. By using my call option spread strategy, the extra premium will actually ‘JUICE UP’ the profit potential of my trade, higher than it ordinarily may be. In looking at the currently COIN options, there is a call option spread that at current prices is offering a 75.4% profit potential if the stock is up, flat, or even down as much as 10% come expiration. Finding high probability trade setups just like this one is why my call option spread strategy has become my absolute favorite over the years!

Wishing You the Best in Investing Success,