Uber Technologies Inc. (NYSE: UBER) seems to be getting ready for a price bump in the short-term as per the latest charts. Uber Technologies Inc. is an American multinational ride-hailing company offering services that include peer-to-peer ridesharing, ride service hailing, food delivery, and a micro mobility system with electric bikes and scooters.
Bullish Indications
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart of UBER, the stock has been forming a falling wedge pattern for the past several weeks. This pattern is marked in purple color in the daily chart. The stock had typically taken support at the bottom of the wedge before bouncing back. Currently, it has broken out of the falling wedge pattern, indicating possible bullishness.
UBER – Daily Chart
#2 %K above %D: The %K line of the stochastic is currently above the %D line in the daily chart, indicating bullishness.
#3 MACD above Signal Line: The daily chart shows that the MACD line (blue color) is currently above the MACD signal line (orange color). This is a possible bullish setup.
#4 Bullish ADX and DI: The ADX indicator shows bullishness in the daily chart because the (+DI) line and the ADX line are greater than the (-DI) line, and ADX is starting to move up from below (-DI) and (+DI).
#5 Price above MA: The price is currently above the short-term moving average of 50-day SMA. This usually implies a possible bullish bias for the stock.
#6 Above Support Area: The weekly chart shows that the stock is currently trading above a resistance-turned-support level. This is marked as a pink dotted line. The stock is also trading above the 50% Fibonacci retracement level. This seems like a good area for a reversal.
UBER – Weekly Chart
#7 Bullish Stoch: In the weekly chart as well, th %K line of the stochastic is currently above the %D line. There is also a Stoch-Price positive divergence. The Stochastic made a higher low while the price made a lower low, indicating that the selling pressure is reducing and the stock may move higher.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can buy the shares of UBER if it trades above yesterday’s high. This translates to a price of around $45.
TP: Our target prices are $60 and $70 in the next 3 to 6 months.
SL: To limit risk, place a stop loss below $38.00. Note that the stop loss is on a closing basis.
Our target potential upside is 33% to 56% in the next 3-6 months.
For a risk of $7.00, our first target reward is $15.00 and the second target reward is $25.00. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling wedge pattern with high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
— Tara
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