Coinbase Global, Inc. (NASDAQ:COIN) shares are moving higher Monday. They gained almost 12% Friday after the SEC allowed tokenized stocks to trade in the U.S.

The shares are approaching a resistance level. The rally could end or pause at it. This is why Coinbase is the Stock of the Day.

Good traders understand how important psychology is in the market. Examples of it can be seen on the chart of Coinbase.

In February, a steep downtrend ended around the $145 level. A rally followed.

When this happened, many of the people who sold at this price decided it was a mistake. They also decided to buy their shares back at the same price they sold them for.

As a result, when the shares dropped back to $145 in June, they placed buy orders. These orders created support.

A similar thing occurred after the shares rallied. When they dropped back to $145 in August, remorseful sellers again created support at that level when they repurchased their shares.

The mirror image occurs at resistance.

In March, there was resistance around $215. A selloff followed.

When this happened, many of the people who bought shares decided that doing so was a mistake. Some decided to hold onto their losing positions.

But they also decided to exit their positions at breakeven if they could eventually do so.

So when the stock rallied back to $215 in April, they placed sell orders. These orders created resistance at the level again.

Then a similar thing occurred. Remorseful buyers selling created resistance around $215 when the shares returned to this price in May.

If Coinbase reaches this level again, there is a good chance it hits resistance once more.

Good traders understand market psychology. They understand how sellers’ remorse can create support, and buyers’ remorse can create resistance.

COIN Stock Price Activity: Coinbase Global shares are trading higher by 5.68% at $205.28 at the time of publication on Monday, according to Benzinga Pro data.

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