Cloud-based artificial intelligence (AI) lending platform Upstart Holdings (UPST) reported soft first-quarter guidance after a fourth-quarter earnings beat Tuesday evening. A major sell-side downgraded UPST to "sell." Despite this mixed story, the share price of UPST is up around 25% Wednesday morning.
Let's step back and view the charts and indicators.
In the daily bar chart of UPST, below, I can see that the shares jumped higher Wednesday morning but the gains fell short of the rally high set earlier this month. Prices are above the 50-day moving average line but below the declining 200-day line.
The On-Balance-Volume (OBV) line is still in a downward trend telling me that sellers of UPST remain more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is only slightly above the zero line.
In the weekly Japanese candlestick chart of UPST, below, I see a longer-term downtrend in force as prices trade below the declining 40-week moving average line. I do not yet see any bottom reversal pattern.
The weekly OBV line shows some improvement within a longer-term decline. The MACD oscillator is still below the zero line.
In this daily Point and Figure chart of UPST, below, the software projects a bearish price target of just $5. Ouch.
In this weekly Point and Figure chart of UPST, below, an upside price target in the $47 area is suggested.
Bottom-line strategy: Shares of UPST are up sharply but this kind of sharp gain without a real base pattern is often "a flash in the pan" so traders should not rush to become a buyer.
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