Webull stock rare pattern points to more gains as SEC ends Pattern Day Trader rule

Webull stock price has rebounded in the past few days, and this trend may continue in the near term as it has formed a highly bullish chart pattern and its growth trajectory is continuing. BULL jumped by 13% on Wednesday, reaching its highest point since March 5 this year. This rally happened after the SEC ended the Pattern Day Trader rule. 

Webull stock technical analysis points to a rebound 

The daily timeframe chart shows that the Webull stock price has crashed in the past few months, moving from a high of $18.30 in July last year to $6 today.

Most recently, the stock formed a giant falling wedge pattern, characterized by two descending and converging trendlines. In this pattern, a bullish breakout normally happens when the two lines are nearing their convergence.

Webull has now moved above the upper side of the wedge and is attempting to move above the 50-day Exponential Moving Average (EMA). 

At the same time, the Relative Strength Index (RSI) and the MACD indicators have continued rising, a sign that its is gaining momentum.

Therefore, the most likely scenario is where the stock continues rising, possibly to the next psychological level at $10, which is about 75% above the current level.

On the flip side, a drop below the lower side of the wedge, which is the all-time low, will invalidate the bullish outlook in the near term.

BULL stock chart | Source: TradingView

Webull’s business is doing well 

Webull is a top Chinese company aiming to disrupt the trading and investing industry. Its business model resembles that of Robinhood, the giant that has disrupted the industry.

The most recent results showed that the company's business is doing well as more users join and the assets in the platform jump.

Webull made over $571 million in revenue last year, a 46% surge from the previous year. This growth was much lower than Robinhood’s 52%, but reflected a major improvement from a year earlier when it experienced no growth.

The company’s operating expenses rose to $460 million, while the adjusted operating profit rose to over $110 million. This performance happened as the number of funded accounts rose from 4.66 million in 2024 to 5.03 million. Customer assets in the platform jumped to over $24.6 billion.

Webull's business benefited from several initiatives last year, including the launch of its prediction market in a collaboration with Kalshi. It also reintroduced cryptocurrencies, expanded to new markets like Canada and some European countries. Also,it started offering corporate bonds on its platform.

Analysts believe that Webull’s business will continue doing well, with the average estimate among analysts being its revenue will jump by 27% this year to  $728 million, followed by 20% to $875 million next year.

Webull will never surpass Robinhood, which has established itself as the market leader in the United States. However, the company will likely continue to emulate Robinhood’s business model and continue growing.

There are also signs that its business has become a bargain with a forward PE ratio of 21, much lower than Robinhood's 32. Its renewed growth trajectory and its lower price means that investors will continue buying the dip.

Meanwhile, the company will benefit from the decision by the Securities and Exchange Commission ended the Pattern Day Trader rule, which limited the number of trades that small retail traders opened. 

PDT allowed that traders with less than $25k to open just four trades a week. With the rule now ended, the company, together with its peers like Robinhood will see more activity among traders.