Hi everyone! I’ll be updating my TA on one of my ideas.
Lyft, Inc. (NASDAQ: LYFT)
In my previous newsletter, I talked about how LYFT was likely to make a pullback to 13.76, which would prove to be a significant buying opportunity. Evidently, we did not get the pullback. Therefore, the next order of business was to look for an overhead resistance and go long on a retest of support.
I note that the 18.36 level checks these boxes. This level has been sticky for the past 3 years, and we duly retested it early in the session before closing above this level. I also note that there has been a trend markup, with steeper higher lows being made (green ascending trendline). The stock is now trading in a smaller ascending channel pattern.
Interestingly enough, LYFT is in the midst of forming another leg of hidden bullish divergence while retesting the support at 18.36. This is indicative of a possible leg higher, depending on how we open tomorrow. However, given the accumulation down into this support level and the resistance-to-support flip taking place here, I am leaning towards the bull thesis.
The next swing target would be the low of the bear gap, at 22.46. We also have a prior imbalance sitting at 21.52 on abnormally low volume. I’ll be watching for bearish divergences to form as we head into these levels, which could signal a pullback.
However, my belief is that LYFT is likely to continue trending higher, until it retests its larger trend - namely a falling wedge pattern dating back to its IPO. We could be looking at the entire gap from 22.46 to 30.06 to fill before a rejection and pullback. We might also see a breakout of the ascending channel and broadening wedge pattern at some point, but I’ll update my TA again when we get there.
Either ways, given how UBER has moved over the past few months, could LYFT follow suit, with them being in the same industries? Technicals suggest this could be the case.
Sentiment: BUY (Unchanged)
Summary (with Price Targets - NFA):
Continues to trade within the long-term falling wedge consolidation pattern, but is currently in a small ascending channel pattern with a measured move towards 22.46 and a longer-term move towards 30.06 to fill the entire bear gap.
Investors can consider accumulating above 18.36, as this is a major prior resistance level which is turning into support. This could signal a “floor” for the stock moving forward.
The bearishness of the broader market might impact near-term price action, resulting in more volatile price movements or periods of choppiness.
Alright, that’s all for this newsletter. Catch you in the next one!
$Uber(UBER)$ $Lyft, Inc.(LYFT)$ $DoorDash, Inc.(DASH)$ $SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ Trust-ETF(QQQ)$
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