Are you guilty of letting day-to-day headlines drive you crazy and your investment decisions? It’s hard not too. But when it comes to Lyft (NASDAQ:LYFT), hailing a ride continues to be all about the LYFT stock price chart. Let me explain.
Hazards for investors always exist. Today that reality is another all-too-common surprise by an off-keel POTUS making a move on tariffs against China and rekindling trade war risks. But for investors considering the purchase of rideshare company Lyft stock, those worries amount to unnecessary baggage which gets in the way of profits.
Following late October’s quarterly confessional, LYFT bulls are firmly in control both off and on the price chart. The Q3 report itself was a terrific one. In summary, Lyft stock delivered record-beating revenues, blasted past Street earnings views and issued upwardly revised top- and bottom-line guidance. Not bad, right? Yup.
LYFT management also stood firmly by the results as part of a much stronger future for the company. CEO Logan Green stated Lyft’s third quarter was proof of significant progress toward profitability enabled by increased engagement through product innovation and execution. Sound even better? Correct.
And on the Lyft stock price chart, conditions are looking equally supportive for buying shares in the near future.
Lyft Stock Price Daily Chart
Following a bit of short-lived and tricky profit-taking in the report’s immediate aftermath, the price action in LYFT stock has turned decidedly bullish. The same can’t be said for its much larger peer, Uber (NYSE:UBER) following its own much weaker earnings announcement.
What’s more, Lyft stock is now offering a technically supportive road to risk-adjusted profits for today’s investors.
Within fresh relative highs secured this past week Lyft stock has formed an uptrend off its all-time-low from October. Currently, four sessions of lateral consolidation work is testing its former low from May. A breakout above the pattern high sets up a potential momentum entry.
This type of entry in LYFT demands setting a stop-loss beneath support. With stochastics in an overbought position, this adherence becomes even more critical. A failure to commit to money management could result in losses piling up within a potentially larger countertrend pullback. And that could always get worse too.
On the other hand, if a more meaningful correction within Lyft stock’s uptrend occurs in the coming days, investors should be prepared to buy shares on weakness.
Ideally, a decline in LYFT shares will result in a test of zone support. Fibonacci and trendline analysis show $43 – $45 as a key area where a higher-low can form with solid technical backing. This would also likely go a long way toward easing today’s overbought stochastics. However, Lyft stock buyers need to respect the low or they risk holding onto a much more questionable loss.
Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits.