Uber (UBER) stock roared into the New Year with gains of almost 5% on Thursday. The stock’s strength ran counter to an otherwise weak day for consumer discretionary stocks.
Uber’s rally was triggered by the stock being added to Goldman Sachs (GS) US Conviction List. Shares of Norwegian Cruise Line Holdings (NCLH) were also added to the list.
Goldman’s U.S. Conviction List is a group of stocks that the Wall Street firm believes could outpace the S&P 500 Performance.
Shares of Uber have been trading in danger of moving into a long-term bear market.
The stock is trading almost 30% lower than its October highs. Shares began their decent after the company forecasted operating metrics that were less than investors expected. The forecast came following a strong earnings report that beat both earnings per share and revenue targets.
Shares of Uber spent much of November and December trading above $70, a critical technical level – only to continue their decline in December. Investors have started to become more concerned with the return of inflation and its effect on consumer spending in 2025.
Now, shares have spent the last two weeks bouncing across the $60 price level as the stock tries to hold on to its 20-month moving average, also at $60.
A move below $60 would shift Uber’s long-term trend from a bull to bear market.
Uber’s next earnings report is slated for February 5. The stock is likely to maintain its trading just above the $60 ahead of that report, putting the stock in a make-or-break position.
From a chart perspective, Uber shares completed a “Death Cross” pattern just more than a week ago on December 24.
A Death Cross occurs when a stock’s 50-day moving average crosses below its 200-day moving average. The patter forecasts negative momentum and lower prices over the following 4-6 month period.
Uber stock’s last Death Cross happened in August 2021 ahead of a 28% decline in Uber’s value.
Shares of Uber remain neutral-to-bearish with a price target of $55.
