LYFT Looks Like a Good Pick for Spring

There's still plenty of room for upgrades, too

Mar 4, 2021 at 2:21 PM
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The shares of rideshare name Lyft Inc (NASDAQ:LYFT) recently staged a breakout above the $54 level, an area that is now serving as support. Furthermore, the ascending 20-day moving average has caught up to this trendline, and could also prop up these shares.  With this technical support in place, now looks like a good time to enter a new position on LYFT.

LYFT WT repost

There is still some room for upgrades amongst the brokerage bunch, with seven of the 26 analysts in coverage carrying a tepid "hold" rating. Meanwhile, short interest makes up 9.9% of the stock's available float. In other words, it would take nearly four days to buy back these bearish bets at LYFT's average pace of trading.

Now looks like a good time to weigh in on the security's next move with options, too. The stock is seeing attractively priced premiums at the moment, per Lyft stock's Schaeffer's Volatility Index (SVI) of 60%, which sits in just the 8th percentile of its annual range. Furthermore, LYFT's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 85 out of 100, meaning the equity has tended to exceed options traders' volatility expectations during the past year. Lastly, our recommended call option has a leverage ratio of 5.6 and will double in value on a 17.6% rise in the underlying security.

 

Subscribers to Schaeffer's Weekend Trader options recommendation service received this LYFT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

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