At the lows, Lyft and Uber were down about 4% and 3%, respectively. In premarket trading, the losses were a bit larger.
The dip came after a “judge in California invalidated a 2020 ballot initiative that allowed the ride-sharing groups to classify workers as independent contractors.”
However, both stocks were in positive territory by midday Monday.
Both companies reported earnings in early August and the stocks tried to shake off the selling pressure. However, that endeavor has been unsuccessful thus far.
With Monday's rally off the lows, it’s got investors wondering if the bottom is in.
Trading Uber Stock
Uber has a pretty interesting chart. The move from a lower open back above the prior day’s close price - known as a red-to-green move - has many traders feeling encouraged.
The fact that the stock made new 2021 lows and made a red-to-green move on negative news adds strength to the bulls’ case.
That’s not to say there aren't hurdles in the way, though.
Uber is below all of its major daily moving averages, as the 10-day has been acting as resistance amid the current downtrend. The stock is also contending with last month’s low at $40.15.
If the stock struggles with these measures, Monday’s low at $38.84 remains vulnerable. Below that and a decline to the $36.15 to $37.50 area is possible.
Above the 10-day moving average puts the 21-day moving average in play, along with the bear-market bottom near $43, which was made in May. Above that level will have investors looking for a test of the 50-day.
Trading Lyft Stock
Lyft has been trending lower since topping out in March.
After reporting earnings earlier this month, shares broke below the 200-day moving average. While this mark was quickly reclaimed, the stock wasn’t able to hold up over it.
Last week, the stock broke its post-earnings low, while Monday’s early action had it dangerously close to the 21-month moving average and the 2021 low at $42.94.
On a rebound, bulls need to see Lyft reclaim the 10-day moving average and $50. Above the latter will put the stock back above the post-earnings low and last week’s resistance.
Below Monday’s low leaves the 2021 low in play. Below $40 and bears may look to flush this one lower.