Bear Signal Threatens to Pressure Lyft Stock Lower

LYFT also announced a partnership with EVgo today

Deputy Editor
Dec 14, 2022 at 11:53 AM
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Ride-hailing platform Lyft Inc (NASDAQ:LYFT) and EVgo (EVGO) are launching a new partnership to provide Lyft drivers with discounted charging on EVgo's fast-charging network. The news is boosting Lyft stock today, with the shares last seen 3.8% higher to trade at $12.04 bringing the weekly gain to nearly 10% already. However, if past is precedent, a bear signal is flashing on the charts that could send the LYFT south once more.

Per a study from Schaeffer’s Senior Quantitative Analyst Rocky White, LYFT just ran into a trendline that has been a bearish indicator in the past. Per White’s study, Lyft stock is within one standard deviation of its 50-day moving average for the sixth time in the last three years. After the last five signals, the equity was lower one month later 60% of the time, averaging a 5.2% loss for that period. A move of this magnitude would still keep the shares above their Dec. 7, all-time low of $10.09, but would add to their 72.2% year-to-date deficit.

LYFT Chart December 142022

An additional unwinding of optimism amongst options traders could also have bearish implications. This is per Lyft stock's 10-day call/put volume ratio of 8.27 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 96% of readings from the past year, indicating long calls being picked up at a much faster-than-usual rate in the last 50 days

Lyft stock is sporting relatively cheap options at the moment. This is per the equity’s Schaeffer’s Volatility Index (SVI) of 74%, which ranks in the relatively low 24th percentile of readings from the past year.


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