In our June 29 review of the artificial lending platform Upstart (UPST) , we wrote that "Shares of UPST are indicated lower Wednesday. Continue to avoid the long side of UPST." The company just pre-announced a weaker than expected second quarter and lowered their guidance on revenue. Traders have quickly reacted with sell orders.
Let's check the charts again.
In this daily bar chart of UPST, below, we can see that prices have remained weak since October. Prices trade below the declining 50-day moving average line and well below the declining 200-day moving average line.
The On-Balance-Volume (OBV) line has been steady since early May but a rising line would be more encouraging. The Moving Average Convergence Divergence (MACD) oscillator has improved from May but still remains below the zero line and a buy signal.
In this weekly Japanese candlestick chart of UPST, below, we can see that prices are not showing a bottom reversal yet nor lower shadows telling us that traders are rejecting the lows. The slope of the 40-week moving average line is negative.
The weekly OBV line shows weakness from February but could be starting to base. The 12-week momentum study shows us that the pace of the decline has slowed.
In this daily Point and Figure chart of UPST, below, we can see a downside price target in the $20 area.
In this second Point and Figure chart of UPST, below, we used weekly price data. Here the software shows us a $10 price target.
Bottom line strategy: Despite the company news Friday, shares of UPST have not made a new low for the move down. This observation is only slightly bullish and may not last too long in this current market environment. With lower price targets from our Point and Figure charts, I find no technical reason to recommend the long side of UPST. Continue to avoid it.