Wise share price cup & handle pattern points to more gains

By:
on Sep 13, 2023
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  • Wise stock price has jumped by more than 43% from the YTD low.
  • The company is benefiting from the rising transaction volume.
  • Most importantly, it is seeing strong growth as interest rates remain high.

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Wise (LON: WISE) share price has bounced back in the past few days as demand for the fintech stock rises. The shares jumped to a high of 697p on Wednesday, a 155 increase from the lowest point on August 31st. It has soared by over 43% from the lowest level this year, giving it a market cap of over 7 billion pounds.

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High interest rates beneficiary

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Wise, formerly known as TransferWise, is one of the biggest fintech companies in the UK. The company provides numerous services to global clients. For example, it enables people to send money to their family, friends, and colleagues. 

Wise also provides Platform, a service for banks and other companies. This platform makes it easy for these companies to provide financial services at faster speeds and low transaction costs. Some of its customers are companies like Monzo, Emburse, and N26.

Its business solutions simplify how people pay their employees spread around the world. As such, it is benefiting from the ongoing trend of hybrid working and outsourcing.

Most importantly, Wise is seeing its business do well because of the ongoing migration trends. This is an important move since Wise is used by millions of people to send money back to their home countries. 

The most recent results showed that Wise business is continuing to gain traction. The number of quarterly active customers jumped by 33% to 6.7 million. Volume of transactions rose by 16% to £28.2 billion, leading to a 29% increase in revenue to over £240 million. 

Wise has another catalyst that could push its revenues higher in the coming months. Its Wise Account lets people save their money safely in the ecosystem. As such, the company can simply invest these funds in safe instruments and pocket the interest.

Wise customers have deposited billions in the platform. They had over £11.5 billion in which the company earned a gross income yield of 3.4%. Precisely, its interest income came in at over £95.7 million, a 34% YoY increase. In contrast, Wise earned just £0.6 million in interest in Q1’22.

Wise share price forecast

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The daily chart shows that the Wise stock price has made a strong rebound in the past few days. A closer look shows that the stock has formed a cup and handle pattern. It is now forming the handle section of this pattern. The stock has jumped above the 50-day and 25-day moving averages. It is also higher than the important support at 607p, the highest point on March 7th.

Therefore, the outlook for Wise stock is bullish, with the next level to watch being at the year-to-date high of 778p, which is ~12% above the current price. A move above that level will see it jump to the next psychological level at 800p.

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