Uber Stock Could Bounce, Says Bull Signal

There's a surprising amount of pessimism surrounding Uber stock

Deputy Editor
Sep 27, 2022 at 12:20 PM
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Things are looking up for Uber Technologies Inc (NYSE:UBER). It was recently revealed that a UBS Evidence Lab driver survey showed that drivers and consumers prefer Uber to sector-peer Lyft, with both segments downloading the former ride-sharing app more than the latter. While Uber stock shed 11.2% in the last week and now stands 33.3% lower year-to-date, the equity was last seen inching higher on the day. What's more, the security just pulled back to a historically bullish trendline that could send the shares higher still.

In addition, UBER's 80-day has had bullish implications in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, this signal flashed four other times over the last three years. One month later, Uber stock averaged a 9.3% pop in 75% of the occurrences. From its current perch of $27.75, a similar move would put the ride share concern above $30. 

UBER Chart September 27

 

Pessimism has spread throughout the options pits too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), UBER sports a 50-day put/call volume ratio that stands in the 85th percentile of annual readings. In other words, puts have rarely been more popular during the past year, and an unwinding of this sentiment could provide tailwinds for the shares.

Options traders are pricing in relatively low volatility expectations, as evidenced by Uber stock's Schaeffer's volatility index (SVI) of 64%, which ranks in the relatively low 33rd percentile of its annual range. In other words, options premiums are low right now, and the equity tends to outperform said volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) ranking of 78 out of 100.

 

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