While the broader market enjoyed notable gains on the day, that’s not why Uber rose so much. Instead, the two stocks are soaring after succeeding on the Proposition 22 vote in California.
This was a very important vote as it pertains to driver labor laws in the state. By Prop 22 receiving enough endorsement votes, companies like Uber, Lyft, Instacart and others will be able to keep their labor arrangements.
Although this is being criticized by many, it’s being cheered by Wall Street.
With the move, Uber temporarily notched new 2020 highs. Can it continue its push higher on renewed momentum? Let’s look.
We are no stranger to Uber, having traded the stock between $38 resistance and $28 support.
That zone is evident on the weekly chart above, particularly as Uber stock break out of it this week.
Uber stock is up big on Wednesday, but the momentum began before that. Shares are up almost 20% so far this week, as shares have been gaining ground each day this week.
Now hitting its highs from February 2020, Uber stock has pulled back a bit. Let’s take a second to simply appreciate its ability to get back to this level in the first place, with all that is going on in the travel industry and economy.
If shares can push through the $42 area, it opens the door to resistance from mid-2019, up near $46. If Uber gets there, its prior all-time high up at $47.08 is on the table.
As measured from the March low to the preceding 2020 high, the first extension that comes into play is the 123.6% extension at $48.50. Above $50 and investors may turn their sights to the 161.8% extension as their longer-term price target, near $59.25.
On the downside, bulls need to see prior resistance at $38 turn to support. That would be very bullish price action and allow Uber stock to establish a new and higher trading range.
Below puts the 10-week moving average in play, currently near $36, followed by the 50-week moving average and prior channel support (blue line).