Uber: An analyst's view post IPO

by Alistair Strang from Trends and Targets |

After a tough start to life as a listed company, our chartist studies the most likely outcome for Uber's stock price.


The media have been frantically inventing numbers in an attempt to make sense of what happened with Uber (NYSE:UBER). It seems, in the USA, conventional wisdom expected the share price to accelerate upward, perhaps even to the $80 mark. Instead, the IPO fizzled, closing the day down 7.6%.

Traditionally, we at Trends and Targets dislike IPO's as often they appear designed to extract funds from the gullible, those folk who believe a share price will always keep heading upward. More usually, once any PR hype fades, the gullible find themselves trapped at the top of a price cycle, watching their money going on what usually is a protracted holiday.

When reviewing price movements during Friday's share launch, a couple of interesting numbers appear to have made themselves known.

Firstly, if the IPO is in real trouble, the share price needs to be below $38 to justify real panic. Aside from knowing the market wants to drive the price downward, we'd be unable to project any realistic "bottom".

The immediate situation suggests weakness below $41 risks a visit to an initial $39.8 with secondary, if broken, at the critical $38 bottom.
On the plus side, price growth above $45 is liable to promote growth to an initial $46 dollars.

If bettered, secondary calculates at $46.7. Unfortunately, the share price requires exceed $48.20 to suggest it's about to get illogical as we're completely unable to calculate higher beyond such.

In other words, if the market exceeds $48.20, the market intends to Uber somewhere interesting. 

For now, it give the excuse to present the most boring chart available!

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

get more news and expert articles direct to your inbox
Sign up for a free research account and get the latest news and discussion, and create your own Virtual Portfolio