Robinhood's IPO was last thursday. Image source: Robinhood, twitter.com
The latest IPO on the Nasdaq is bound to stir extra volatility on the Composite Index. Following the highly anticipated introduction of Robinhood on the stock market, the index is likely to continue surging towards the next psychologically significant target.
Robinhood, the U.S.-based trading platform that seeks to make trading easier for small retail traders, had its Initial Public Offering last Thursday. The share price, with a ticker HOOD, rallied more than 26 per cent in a day of heavy trading yesterday.
The IPO price was set at $38 before sliding more than $8 by the end of last week's session, followed by a partial recovery. However, HOOD's share price climbed nearly $10 yesterday, closing at $46.80.
GOOD 15 Min Price Chart. Image source: Trendsharks ©, created with TradingView.com
The correction that followed the IPO took the form of a Descending Wedge pattern, as shown on the 15 min price chart above. The upper end of this correction was underpinned by the price of the Nasdaq Composite index.
A temporary consolidation ensued alongside this upper benchmark that was followed by a decisive breakout yesterday. At present, there is a definite uptick in bullish momentum.
Enthusiasm inspired by the promise of a new future for Wall Street
The rally is inspired by heightened investors' enthusiasm that Robinhood can bring about a fresh beginning for Wall Street. The Menlo, California - based dealer in securities has proclaimed its goal to "democratize finances for all".
We are all investors đź”” pic.twitter.com/ZGv0bkElBG
— Robinhood (@RobinhoodApp) July 29, 2021
Many small retail investors perceive this as the break they have been waiting for, giving them one foot in the door on Wall Street and a chance to fight against the established order of big financial institutions that have been driving capital markets for decades.
Today, as @RobinhoodApp goes public on @Nasdaq, we celebrate a new generation of investors that make Robinhood what it is.
— VLAD (@vladtenev) July 29, 2021
Yet, the self-proclaimed crusade of some retail traders against the establishment has stirred controversy in the past, peaking with the Redditt-controlled Wallstreetbets plan.
At any rate, Robinhood's IPO is likely to bring about even more volatility to the market in the longer term.
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