The stock rose Thursday on strong earnings.
Xu said that all of the actions they took during the pandemic gave their restaurant partners eight times better odds of surviving the pandemic. DoorDash is now shifting gears, helping restaurants navigate the recovery with new pricing plans that offer more choices to help them succeed.
When asked about their business amid the recovery, Xu noted that engagement is up across all areas. That's because they provide restaurants with the more efficient routes and delivery options. Delivery services are still in the early innings, he said.
And while DoorDash didn't always have a lot of capital to spend, the company was still able to grow its market share and make a big difference for their partners.
Let's check on the charts of DASH.
In this daily Japanese candlestick chart of DASH, below, we can see that the shares have been in a decline since the middle of February. Prices made a low in early March -- notice the spike in trading volume and the upturn in the On-Balance-Volume (OBV) line? The slopes of the 20-day and 50-day moving averages are negative.
The 12-day price momentum study in the lower panel makes a low with the price action. Now in May the momentum study is making a higher low even though prices have declined to a new low. This difference in movement is a bullish divergence as the new low in price was not confirmed by a new low in the indicator. Divergences are imprecise indicators when it comes to timing.
In this daily Point and Figure chart of DASH, below, we can see a potential downside price target in the $73 area.
Bottom-line strategy: While the daily candle chart shows a bullish divergence and a rising OBV line we do not see any lower shadows telling us that traders are rejecting the lows. Avoid the long side of DASH for now.