UBER vs LYFT.
I’m not talking about the businesses; I’m talking about the stocks.
UBER’s IPO has held up well, while LYFT’s IPO was a disaster.
However, read below to for the rest the story (and how you can profit from it).
I covered LYFT as a trade idea on June 7th. At that time the trade was to be a buyer if it traded over $63.50.
That trade was not triggered, and it subsequently pulled back. The pullback has increased the attractiveness of LYFT when it breaks $63.50 because the recent pull back stopped at important support.
In fact, yesterday’s move up in LYFT was a breakout of 2 days of consolidation on support.
Now, if it moves above $62.00 it’s a buy with a stop under $58.50.
I would not pay more than $62.50. If it gaps over this buy zone, wait for either a pull back or a break of $63.50 to enter.
UBER is in a very similar and equally powerful breakout pattern.
In fact, UBER has a better pattern because its breakout will be a new high.
Like LYFT, yesterday UBER traded out of a flag pattern that bottomed on good support. It also closed over $44, which has been an important swing level.
The high in UBER is $45.75, and a trade over $46 would be a breakout worth buying.
However, if both UBER and LYFT move higher together there is an earlier trade.
The trade is to buy UBER over $44.50 with a stop under $42.50 or better would be under $41.50.
The reason to enter UBER earlier is to have a lower risk down to $41.50.
The reason I covered both stocks in one day is so I could point out that they have the same pattern of pulling back to support and breaking higher yesterday. Both are right under big breakout levels.
If they both breakout, that will be the best scenario.
UBER will be a new high which I’d prefer, but LYFT could quickly rally back to $85-$90 which almost a 50% move.
Both look good, and they look better together.
Rick Nartarian, Chief Investment Officer
The American Investor Daily