In his first Executive Decision segment of Tuesday's "Mad Money" program, host Jim Cramer sat down with John Zimmer, co-founder and president of ride sharing giant Lyft (LYFT) .
Zimmer painted a bullish picture of Lyft, saying that after seeing 70% of its business shut down during the pandemic the recovery is now at hand. The company saw "good signs" this quarter, he said, as more and more riders have returned to the platform.
While there are 20% more riders per driver, the recovery has not been equal,Zimmer said. East Coast markets are at 90% of pre-pandemic levels, while West Coast markets are only at 50%.
Zimmer said he was encouraged by these results as well as the possibilities for all of Lyft's mobility options, including bikes and scooters and the return of ride sharing, which was disabled throughout much of the pandemic.
Let's check out the charts of LYFT before getting in the car.
In this daily bar chart of LYFT, below, we can see that prices have been in a downward trend for at least the past 12 months. Prices trade below the negatively sloped 50-day moving average line and the negatively sloped 200-day line. The On-Balance-Volume (OBV) line has been in a matching decline the past year, telling us that sellers of LYFT have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line, which tells us the trend is weak.
In this weekly Japanese candlestick chart of LYFT, below, we see a bearish picture with prices in a downtrend below the negatively sloped 40-week moving average line. There are no bottom reversal patterns showing and no meaningful lower shadows to suggest that traders are finally rejecting the lows. The weekly OBV line is in a steep decline as traders seem anxious to sell their positions. The MACD oscillator is bearish, too.
In this daily Point and Figure chart of LYFT, below, we can see the software is projecting the $13 area as a downside price target.
In this weekly Point and Figure chart of LYFT, below, we can see that prices reached and exceeded a downside target of $26.
Bottom line strategy: Despite the positive message from the president of LYFT the charts and indicators remain bearish. I would continue to avoid the long side of LYFT.