The Uber stock price continued the slide yesterday. The ridesharing company dropped 4.7% after hours after reporting a wider-than-expected loss in Q2.
Uber Technologies Inc (NYSE: UBER) finished Wednesday at $41.81, down $0.98 (-2.29%). However, it was the trading after the bell that did the real damage. The stock shed $1.98 (-4.69%), falling below $40.00 for the first time this year.
The second-quarter earnings call revealed revenue growth of 35% QoQ and 105% YoY. Furthermore, gross bookings for the quarter came in at $21.9billion, a 114% increase on the same period in 2020. However, its adjusted EBITDA loss of $509 million was far greater than the consensus -$324.50.
Wall Street was less than impressed, and the last traded price of $39.85 extends the decline from February’s high to -37%.
This has left the Uber stock price dangerously close to a major support level. And if the weakness spills over into today, it will be tested.
The daily chart shows Uber has lost 21% since the start of last month. As a result, the price is below the 50, 100 and 200-day moving averages ($48.56, $51.34, $51.26). Furthermore, the 50 DMA has crossed below both of the longer-term indicators, highlighting the negative momentum.
Notably, a clear level of horizontal support is visible at $38.50. This was a previous resistance level, which, when broken, triggered a 65% rally between October and February.
On that basis, it is now major support. If the price breaches $38.50 on a closing basis, the 2020 double bottom at $28.00 is the next target.
Therefore, the UBER stock price must maintain the $38.50 threshold. If it does, this will relieve the immediate pressure. However, the bearish view is intact as long as the stock remains below the key moving averages.
On that basis, should the price advance past $51.34, it will invalidate the negative call.