Lyft, Inc. (LYFT) is the 'Stock of the Day' at Real Money this Thursday. The share price of LYFT was up about 8% in early market activity after their 2019 outlook boost and Q2 earnings beat. We do not have a lot of price history to work with on LYFT but let's see what we can glean.
In this daily bar chart of LYFT, below, we can see how a "hot IPO" can sometimes behave. There are a lot of moving parts to an IPO. Its success can depend on the road show, the managers of the deal, the public and institutional appetite, voting rights, the fine print, and so forth.
The common misconception is that the new issue market can be a way for so called insiders to print money with stocks soaring on the first day of trading.
The price of LYFT opened very strong but closed near the low of the day and continued lower the next five weeks or so. Prices recovered to the $65-$70 area from a low in May but a setback unfolded from the middle of July.
Prices crossed below the 20-day and 50-day moving averages in late July and we should see prices back above these shorter moving averages today.
The daily On-Balance-Volume (OBV) line shows a modest rise from early May to now, suggesting that buyers of LYFT have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been narrowing recently so we could soon see a cover shorts buy signal.
In this Point and Figure chart of LYFT, below, we can see a potential downside price target around $45 being projected. A rally to $68.77 is probably needed to turn this chart bullish.
Bottom line strategy: While the price of LYFT opened strong today I would want to see a close above $68.77 to be impressed.