Uber (UBER) has been on fire this year, up more than 50% so far in 2023 and recently touching 52-week highs.
When compared with Lyft (LYFT), Uber has been dominant. While Uber is up big this year, Lyft is down about 25% so far in 2023.
The outperformance is magnified when we zoom out to the one-year measure. Uber stock is up 70% over the past 12 months, while Lyft is down more than 50%.
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It helps that Uber stock rallied almost 30% in a four-session stretch from April 28 to May 3. It rallied 10% ahead of the earnings report, then rallied 16% in two days after reporting better-than-expected results.
Given the stock’s powerful burst, it only makes sense that Uber needs to cool off a bit before resuming its rally. Consolidation can take form through price (via a pullback) or through time (via sideways, choppy trading).
Let’s look at one major buy-the-dip area in Uber stock.
Trading Uber Stock
Chart courtesy of TrendSpider.com
Uber stock made a monstrous push off the 200-day moving average. And even as it petered out in the $36 to $37 area in February, this area did not act as resistance amid the current rally.
In fact, Uber stock pushed through this zone and ultimately topped out at $39.23.
In the next few days, the bulls would love to see a pullback to the prior breakout zone of $36 to $37 and the first quarter high of $37.58. In other words, buyers would be looking for this prior resistance level to act as support.
If it happens soon — as in the next few days — there will be the added benefit of the rising 10-day moving average. After such a powerful rally, this measure will act as support if tbulls maintain active control of the stock.
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In many cases, pullbacks and dips are incredibly healthy. Not only do they give the stock a chance to rest, but buyers get an opportunity to reload their long positions.
If support doesn’t come into play in this area, a harder fade could put the $34 to $35 area in play.
On the upside, short-term traders would likely trim on any move back into the $38.50 to $39 area, while fishing for a larger move north of $40.
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