In his recent Real Money column "It Would Be a Genius Move If Uber Buys Grubhub," Jim Cramer considered the reports that Uber Technologies, Inc. (UBER) might acquire GrubHub Inc. (GRUB) . Cramer says UberEats just doesn't have the scale to compete in the delivery market, which is why acquiring GrubHub would make perfect sense. The company has terrific technology and restaurants need delivery to survive.
Let's check out a couple of charts of UBER.
In the daily bar chart of UBER, below, we can see how things have improved from the March low. The stock has worked higher the past several weeks to where prices are now back above the bottoming 50-day moving average line and above the declining 200-day line.
The daily On-Balance-Volume (OBV) line has improved but is still below its February zenith. The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line late last month for an outright go long signal.
This daily Point and Figure chart of UBER, below, is projecting a potential upside price target around $42.
Bottom-line strategy: I will leave the deal analysis to others to figure out if it will be accretive or not or if it is too rich. I will recommend raising stop protection on longs to $26.