Bear Market Warning: Uber Stock is on the Brink

Shares Uber (UBER) traded more than 7% lower on Wednesday following the company's earnings report earlier in the morning.

Looking in the rearview mirror, Uber's results for last quarter were positive as the company beat both top and bottom line expectations from Wall Street.  Revenue from the quarter came in at 20% on a year-over-year comparison. That was higher than analysts’ expectations.

Investors are selling the stock today as they took exception with the company's outlook. For the next quarter, management issued gross bookings guidance that was lower than expected.  Uber's management also made comments during the earnings call that suggested the company may take longer to commercialize its automotive autonomous vehicle business.

The announcement of a longer than expected development of that autonomous vehicle business follows news in January that Uber was partnering with NVIDIA to accelerate this timeline. 

While she has got a boost from that news, they have been unable to overcome bearish momentum.

In January, Uber stock ran into resistance from its 200-day moving average, positioned at the $70. Price level. In addition to that, the stocks 50 day moving average has been in a bearish trend since the beginning of December.

That momentum has led to a decline of 17% in the stock since it started.

Investors should expect more of the same, as the stock is targeting a price level of $60.00 over the next four to six weeks.

From a longer-term perspective, Uber would slip into a long-term bearish market if the shares closed below $63, a price that is only $0.71 away.

Combination of short-term bearish momentum and a break below. The 20-month moving average is likely to target even lower prices for Uber.

As of now, Uber remained in a long-term neutral trend with the possibility of a bear market target of $50.

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