Uber Plunges Follow Q1 Earnings Results: Here's Where To Watch For The Reversal

Uber Technologies, Inc UBER experienced a high level of volatility after the market close on Tuesday and in the premarket on Wednesday.

On Tuesday, between 4:00 p.m. and 5:15 p.m., Uber plunged over 12% lower in sympathy with Lyft, Inc LYFT, which issued second quarter sales guidance below analyst estimates. Uber then began to recover, soaring up over 15% higher, to reach the $30 level at 7:00 a.m. on Wednesday when it printed its first-quarter results, which caused Uber to plunge over 11% lower before ticking up slightly before the market open.

Uber reported a massive miss, with a loss of $3.04 per share, which came in well below the consensus estimate of a loss of 24 cents per share. The mobile-app-based transportation company posted a top-line beat, however, reporting revenues of $6.85 billion compared to the estimate of $6.09 billion.

Uber has been trading in a long-term downtrend since Feb. 11, 2021, losing over 58% of its value. The sharp drop on Wednesday accelerated the decline, bringing Uber down to new 52-week lows and to prices the stock hasn’t seen since May 2020.

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The Uber Chart: Uber gapped down about 7% lower to start the trading day and continued to move lower intraday, falling 11% at one point on Wednesday morning. The decline is a continuation of Uber’s downtrend, with the most recent lower high formed at $33.15 on April 29 and the most recent confirmed lower low printed on April 27 at the $30.16 mark.

• The gap Uber left behind, between $27.75 and $28.85 is about 90% likely to be filled in the future. Bullish traders and investors can watch for the gap to fill when Uber prints its next lower high in the downtrend pattern.
• The rebound is likely to come soon because Uber’s relative strength index (RSI) is measuring in at about 32%. When a stock’s RSI reaches or falls below the 30% level, it becomes oversold, which can be a buy signal for technical traders.
• If Uber closes the trading session near its low-of-day price, it will print a bearish kicker candlestick, which could indicate lower prices will come again on Thursday. If the stock closes the trading day flat or near its high-of-day price, Uber will print a doji or hammer candlestick, respectively, which could indicate a bounce is imminent.
• Uber has resistance above at $29.17 and $32.26 and support below at $26.23 and $23.68.

See Also: Why Uber Shares Are Sliding