Shares of Lyft Inc. (LYFT) were cut to a "hold" rating by a sell-side firm Friday on the heels of the ride-sharing company guiding March-quarter revenue expectations below expectations. Other sell-side firms have also cut their ratings of LYFT Friday.
Let's check the position of the charts and indicators for the stock.
In the daily bar chart of LYFT, below, I see that prices rallied in January but stalled in February ahead of Thursday evening's earnings report. Shares of LYFT are trading around $11 in pre-market trading activity Friday so we are likely to experience a large gap to the downside at the market open. This should put prices well below the 50-day and 200-day moving average lines.
The trading volume did not expand much in January so the rally was on shaky legs. The daily On-Balance-Volume (OBV) line moved up from November but looks to have turned lower in recent days. The Moving Average Convergence Divergence (MACD) is crossing to the downside for a take profit sell signal.
In the weekly Japanese candlestick chart of LYFT, below, I can see an upper shadow on the most recent candle telling me that traders had rejected the highs. The indicators are not bullish and we should see a large red (bearish) candle when this chart is updated after Friday's close.
In this daily Point and Figure chart of LYFT, below, I can see that prices had already reversed to a down column with a bearish price target.
Bottom-line strategy: Shares of LYFT are going to be under selling pressure Friday. Avoid the long side.
