Ridesharing stocks did well on Tuesday after industry pioneer Uber Technologies, Inc. (ABOVE) said it could deliver its first adjusted profit in the third quarter amid rising grocery orders and a rebound in ride bookings. The company had previously announced that it would not reach this milestone until the fourth quarter.
The central theses
- Uber said it could release its first adjusted earnings in the third quarter – a quarter earlier than expected.
- Uber stock staged a crucial volume-backed breakout above the 50-day simple moving average and six-month trendline, increasing the likelihood of subsequent purchases in the days ahead.
- Lyft stocks broke above the upper trendline of a descending channel, opening the door to additional short- to medium-term gains.
Both Above and its smaller rival Lyft, Inc. (LYFT) suffered a blow during the pandemic as potential customers faced driver shortages and lackluster demand worked and learned from home. Hence, a faster than expected move towards profitability for both operators has surprised many investors and created a potential buying opportunity. Below we take a closer look at each stock and analyze the charts to identify possible ones trade Plays.
Uber Technologies, Inc. (UBER)
After a SEC filing Filed on Tuesday, the ridesharing giant is forecasting a loss of $ 25 million and a profit of $ 25 million for the third quarter, a significant improvement on its previous expectation of a loss of $ 100 million. In addition, the company expects gross bookings of between $ 22.8 billion and $ 23.2 billion in the third quarter Guidance between $ 22 billion and $ 24 billion.
“Thanks to the tireless work of the team, we have not only expanded our global leadership position in the areas of mobility and delivery, but also more profitably than ever before,” said CEO Dara Khosrowshahi. “This marks an important milestone for Uber,” he added, hinting at the company’s first quarterly profit. By Tuesday’s close of trading, Uber stock is trading 13% lower since the start of the year and has fallen nearly 10% since the end of June.
The share price made a strong volume-based breakout above the 50-day mark yesterday simple moving average (SMA) and a six-month trend line that increases the likelihood of subsequent purchases in the coming days. Active traders hoping to take advantage of the bullish momentum should look for a possible rise to $ 51.80 – an area on the chart where price a confluence the resistance of a long-term horizontal line and the 200-day SMA. Protect yourself from a downward turn by a. place Stop loss order just below Tuesday’s low of $ 42.18.
A horizontal line is often drawn on a stock chart to identify areas of. to highlight Support or resistance.
Lyft, Inc. (LYFT)
The app-based ride-sharing company had its first quarter healthy, posting adjusted earnings of $ 23.8 million in the second quarter due to increasing demand for its ride-sharing business and cost-cutting measures it implemented last year. Additionally, revenue of $ 765 million was up 125% year over year, slightly outperforming Wall Street consensus at $ 696 million.
“We had a great quarter. We exceeded our outlook on all metrics and have growing momentum,” said CEO Logan Green in a statement on the results. As of September 22, 2021, Lyft stock has a Market capitalization of $ 17.78 billion and is trading nearly 11% higher than last year. However, stocks are down 7.81% over the past three months.
Lyft stock broke above the upper trendline of a. the end descending channel yesterday and opened the door to more short- to medium-term gains despite closing just below the 200-day SMA. Anyone who buys here should consider scale at key overhead resistance levels near $ 62.50 and $ 67.50 with a stop positioned below the September 20th low at $ 50.30.
Disclosure: The author did not hold any positions in any of the above securities at the time of publication.