Here is Why the Robinhood Share Price is Surging Today

Summary:

The Robinhood share price has received a huge boost and is up heavily in premarket trading as Sam Bankman-Fried purchases 7.6% equity.

The Robinhood share price has surged this Friday in premarket trading after reports that a Hong Kong-based crypto exchange has struck a deal to purchase a 7.6% equity in the company.

According to a Securities and Exchange Commission (SEC) regulatory filing, Sam Bankman-Fried, the CEO and Founder of cryptocurrency exchange FTX, has purchased a 7.6% stake in the shares trading platform in a deal worth $648.3m. This acquisition was made using Emergent Fidelity Technologies, a company in which Bankman-Fried is the sole director and majority shareholder. The agreement confers on Bankman-Fried ownership of 56.3 million shares.

The Robinhood share price is up 5.03% as of writing, following the bounce on the price floor after the completion of the bearish pennant. The Robinhood share price has been on a steady decline since the WallStreetBets saga of early 2021. Investors would be watching to see if Bankman-Fried can bring to play the same magic he did with FTX.

The conclusion of the bearish pennant and the bounce on the 7.83 price mark (161.8% Fibonacci extension level) has marked this support as a new bottom. The premarket price activity has broken the 9.01 resistance and the 9.86 barrier (10 May 2022 high).

This action puts the price activity on course to challenge the 4 May 2022 high at 10.87. A successful break of this resistance barrier gives the bulls clear skies to aim for the 1 March 2022 high at 12.27. 13.91 (18 March and 5 April highs) and 15.23 (7 February 2022 high) form additional northbound targets.

Conversely, rejection of the advance at 10.87 could provide for a potential pullback, targeting 9.86 as an initial downside target. If the bulls fail to defend this support, a decline towards 9.01 cannot be ruled out. Other targets to the downside include the 8.55 price mark (127.2% Fibonacci extension level) and the 7.83 all-time low.