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Uber Stock Analysis: After a Sharp Drop, Are Shares a Buy

Uber Technologies Inc. (UBER) stock experienced a significant downturn in its last trading session, leaving investors and traders to question its next move. The ride-hailing and delivery giant closed the day down, erasing early gains and settling near its daily low. This article breaks down the key data from the session and analyzes what traders should be watching for when the market reopens.

A Session of Two Halves

As the provided chart for Tuesday, June 18th, shows, Uber’s trading day was a tale of two distinct periods.

The stock opened strong at

86.48 in the first hour of trading. However, this momentum faded, and a dramatic sell-off began around noon. The stock plunged sharply, hitting its session low of $82.31.

For the remainder of the day, UBER shares consolidated in a narrow range, ultimately closing at

1.32 (1.56%). Post-market trading showed a slight continuation of this negative sentiment, with the stock ticking down another 0.16% in after-hours activity.

 

Key Information for Traders:

  • Closing Price: $83.44

  • Day’s Change: -1.32 (-1.56%)

  • Day’s Range: $82.31 (Low) to $86.48 (High)

  • Previous Close: $84.76

  • 52-Week Range: $54.84 – $93.60

  • P/E Ratio: 14.55

  • Market Cap: 17.45KCr (Note: This likely reflects a regional Google Finance setting, representing approximately $210 Billion USD)

Technical Outlook: Key Levels to Watch on Monday

For traders preparing for the next session, the chart presents clear technical levels.

  • Critical Support: The day’s low of $82.31 is now the most important immediate support level. If the stock opens and trades below this price, it could signal further downside momentum, as it would indicate that sellers remain in control.

  • Immediate Resistance: The stock will likely face resistance near the

    84.76. A confident break above this level would be a bullish sign, suggesting the sell-off was a one-day event. 

The sharp drop from the day’s high suggests that there was significant selling pressure. Traders should watch the opening volume closely on Monday. High selling volume on a break below support would be a bearish confirmation, while low volume could indicate the sell-off is exhausted.

The Fundamental Question: Is Uber Stock a Good Investment Today?

While the short-term technical picture is bearish, the fundamental data offers a different perspective.

A P/E ratio of 14.55 is relatively low for a major technology and growth company. This suggests that, compared to its earnings, Uber’s stock may not be overvalued. For long-term investors, a price dip like this could be viewed as a “buy-the-dip” opportunity, allowing them to enter a position in a profitable company at a more attractive price.

However, the company does not pay a dividend, meaning returns are entirely dependent on capital appreciation.

Verdict for Monday

The decision to invest today depends heavily on your trading strategy and risk tolerance.

  • For the Cautious Trader: It may be wise to wait for confirmation. See if the stock can hold the

    84.00 mark before considering a long position.

  • For the Aggressive Trader: The dip towards the low $80s, combined with a reasonable P/E ratio, might present an attractive entry point. These traders might initiate a small position, using a stop-loss just below the day’s low of $82.31 to manage risk.

In conclusion, Uber stock is at a critical juncture. The sharp sell-off has made it technically vulnerable, but its fundamental valuation remains appealing. The opening hours of the next trading session will be crucial in determining whether this was a temporary dip or the start of a more sustained downturn.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. All trading and investment decisions should be made based on your own research and risk assessment.

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