Webull stock analysis: Is this Chinese Robinhood rival a good buy?

Webull stock price jumped by over 10% on Wednesday as investors bought the dip and as the options market pointed to more bullish positioning. BULL jumped to $6.12, up by 15% from its lowest point this week. 

Webull stock jumped amid bullish options positioning

Webull, a top Robinhood-like company, jumped on Wednesday as investors bought the dip. This rally coincided with the gains across the industry, with Robinhood jumping by over 10% and Interactive Broker rising by 5%.

The rally also happened amid bullish positioning in the options market. Data shows that the put volume stands at 10,240, while its open interest is at 6.455. Call volume, on the other hand, stands at 40,000, while its open interest is 31,235. This means that the put/call open interest stands at 0.21.

Webull has some solid fundamentals even as its stock has slumped by over 92% from its highest point in April last year. The most recent results showed that its revenue jumped by 36% to $159.9 million. This growth, however, was offset by a 65% increase in operating expenses, which pushed its net loss to over $21 million. 

The company has continued to add more users in the past few months. It added 27.6 million in the first quarter of this year, up from 24.1 million in the same period last year. Its funded accounts have jumped to 5.11 million.

The company is seeing strong growth across various areas, including the options business. Its equity notional volume jumped to $261 billion from $128 billion in the same period last year.

Analysts are optimistic that the company will continue doing well in the coming years. The average estimate among analysts is that its revenue will jump by 25% this year to $714 million, followed by 25% increase to $894 million. 

This growth will be driven by the US division, which will benefit from the decision by the Securities and Exchange Commission (SEC) to end the pattern day trader (PDT) rule. This action will likely lead to more activity by small-scale traders. 

The company has also continued to acquire international licenses in key areas like Hong Kong, Canada, and the European Union. 

BULL stock price technical analysis

Webull stock chart | Source: TradingView

The daily chart shows that the BULL stock price has been under pressure in the past few months as its losses have jumped. It bottomed at $4.52 in April and then rebounded to a high of $7.53 on April 21. These gains were limited and the stock retreated to a low of $5.40. 

Webull stock formed a descending channel, which resembles a falling wedge pattern, a common bullish reversal sign in technical analysis. It is attempting to cross the 50-day.

If this happens, the next key target to watch will be at $7.53, the highest point in April this year. On the other hand, a move below the key support level at $5.36 will invalidate the bullish outlook.