Signal: This Rideshare Stock Has Cheap Options, Room To Run

Forbes

a day ago

Don't think UBER's drive up the charts is running out of gas.
Rideshare firebrand Uber Technologies (UBER) boasts a 53.6% year-to-date gain. Despite a post-earnings bear gap back in early May, UBER proved resilient, and nabbed a May 20 record high of $93.60. Now, the shares are testing this level once more, and could barge on through, with this bullish combination flashing.
UBER's new highs are coinciding with historically low implied volatility (IV) -- a combination that has been bullish for the stock in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been five other instances when Uber stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th annual percentile or lower -- as it the case with Garmin's current SVI of 32%, in the 7th annual percentile.
The data shows that one month after those six previous signals, UBER was higher 60% of the time, averaging a 3.7% gain. From its current perch at $92.81, that would mean barreling past that May 20 high, an area that turned the stock away earlier this week.
The enticing technical setup goes deeper than that, though. Note in the chart below the shares' 50-day moving average that contained pullbacks between the two peaks in the last two months. Shorter term, a breakout from current levels would form a bullish flag pattern. Further, note the trendlines connecting late December bottom to April 2025 lows just below $65, as well as then-record highs in October with the May peak. All of the trendlines fit within a bullish uptrend channel that UBER is in, and shows no signs of breaching.
UBER Stock Chart With 50-Day Moving Average
Should Uber Technologies stock resume its uptrend, analyst adjustments to the upside could provide tailwinds. It may have already begun; earlier this week, brokerage firm Cantor Fitzgerald hiked its UBER price target to $106, and more bull notes could be on the way. The equity's consensus 12-month price target of $96.87 is only a 4% premium to its current perch, while 10 brokerages are on the sidelines with tepid 'hold' ratings. Breaking through to new record highs could compel analysts to jump on board for the long term.