Stock of the day: Uber
11 November 2024
Uber's chart shows a significant development that began in mid-October with a promising bullish movement that quickly turned sour. Initially, the price broke above a key horizontal resistance, marked in yellow. This breakout was seen as a strong bullish signal and caught the attention of buyers. However, what followed was not the continuation expected but a reversal that led to a false breakout, marked with an orange rectangle.
False breakouts are powerful signals that indicate a reversal in sentiment, often sparking moves in the opposite direction. Uber's move back below the yellow resistance flipped the sentiment to bearish. The failed breakout is acting as an indicator that sellers are regaining control, providing a compelling short-selling opportunity. The sentiment remains negative as long as the price stays below the yellow resistance.
The potential for further downside movement remains, with traders eyeing lower levels as targets for short positions. Should the price unexpectedly move back above the yellow resistance, this would signal a potential return to bullish momentum and invalidate the short setup. However, given the current technical picture, the likelihood of such a move is low, making the bearish scenario more probable for the time being.