COIN Coinbase Global Weekly Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

Jimmy Chanos the famous short-seller that holds court at his Kynikos Associates, a name no one pronounces correctly, identifies Coinbase as a short play going forward. At conferences every few months, Chanos and others make long and short calls to display their stock trading and forecasting abilities.

The Chanos short call is bad timing, however. Jim should wait a few weeks before loading the boat with shorts. COIN sets up beautifully for the bulls. Price tumbles lower forming the falling wedge a bullish pattern. The RSI and stochastics are oversold; bullish. The RSI, histogram, MACD, stochastics and money flow are all possie d so COIN is on the launchpad ready for liftoff and bingo, price jumps higher from the loaded spring action.

So any shorts Chanos has on now will be going the wrong way. The chart was set up perfectly for the start of a multi-week rally 3 weeks ago. Keystone was sleeping and did not see the set up. Price violated the lower standard deviation band so a move to the middle band, at 220 and falling, at a minimum, is in play. 

Keystone's 80/20 Rule says 8's lead to 2's on the way up so 180 opens the door to 220. Price is at 198 right now so 198 should lead to 202. The indicators are long and strong making higher highs so that tells you more highs are coming on the weekly basis. People will likely laugh and kid Jimmy about his call that may not be going in the right direction. However, they are smart people and Chanos is in it for the long-term. He also employs some complex strategies where he has his arse plenty covered at all times.

So it is foolish to go against Chanos. COIN was a beautiful long play 3 weeks ago. It has legs on the weekly basis but if Chanos sees something amiss others may be poking around asking questions as well so a news story out of left field could damage the rally. Thus, sticking with Jim, the idea is to simply wait for it to top out and then play it on the short side. COIN goes on the short watch list. You need the weekly chart to top-out and a touch of that middle band is likely so it can simply be watched and perhaps shorted in April.

If you feel lucky punk, you can go for the 10% gain as price migrates to the middle band but you have to hope that negative news does not hit the wires. Keystone has no position long or short in COIN right now and will only consider a potential short play in April as explained. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.