The decline leaves Uber stock dangling by a thread, just above its prior 52-week lows. Will this be enough motivation for bulls to come to the stock's rescue, averting new lows, or will bears gun to break this mark?
That's what Wall Street is trying to decipher on Tuesday. The company's mixed report doesn't help matters.
Uber reported a loss of 68 cents a share, 16 cents better than expectations. Revenue grew more than 32% year-over-year to $3.53 billion but still missed estimates by $150 million.
While the bottom line was better than hoped, Uber still lost $1.16 billion in the quarter. Further, gross bookings of $16.47 billion missed consensus estimates of $16.7 billion.
One silver lining is that management raised its full-year EBITDA outlook. It now sees a loss of $2.8 billion to $2.9 billion, improved from its prior outlook of a $3.2 billion to $3.3 billion loss and stronger than the consensus estimate of a $3.2 billion loss.
This mixed situation is playing out on the charts and makes Uber a perfect pick for Real Money'sStock of the Day.
Trading Uber Stock
The price action over the past trading session has been very telling -- meaning that Uber stock broke several key levels (and failed to break out over others) in the days leading up to Monday evening's earnings report.
On October 30 Uber stock rallied into downtrend resistance (purple line), giving bulls an opportunity to reclaim this mark in dramatic fashion going into November.
A day later, though, not only were the shares rejected from this mark, but Uber stock also broke below the 23.6% retracement and the 50-day and 200-day moving averages.
Over the next two days, Uber stock broke below uptrend support (blue line), while finding its 20-day and 50-day moving average confluence acting as resistance.
This is not the bulls' recipe for success -- in fact, it's just the opposite.
Now what? Bulls need to aggressively defend the $28.31 lows at this point. Above it and perhaps Uber stock can fill the gap back up toward $31. But a break below the lows could usher in another wave of selling.
With a lockup expiration on deck and massive losses weighing on the financials, bulls must be careful with Uber stock at this point.
The best-case scenario in the short term is that the prior lows hold as support and Uber stock bounces from here. Still, expect plenty of overhead resistance in the short and intermediate term.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.