Stock Of The Day: Has The Uber Meltdown Begun?

Benzinga · 1d ago

Uber Technologies, Inc. (NYSE:UBER) is consolidating on Thursday. The shares have been in a steep decline, and it appears that this trend may continue.

• Uber Technologies shares are showing limited movement. What’s ahead for UBER stock?

Uber has broken support, and this can be a bearish dynamic. This is why it is the Stock of the Day.

When there are more shares for sale than there are to be bought in a market, the shares trend lower. This is because traders and investors who wish to sell undercut each other's prices. The buyers back away and wait for the sellers to come to them.

Things change at support levels. The downtrend ends or pauses.

As support levels, there is a large amount of demand for a stock. There are as many, or maybe even more shares to be bought than there are for sale. Sellers can sell as many shares as they wish without having to undercut each other, so the price stops dropping.

Sometimes stocks rally after they fall to support.

The $82 level has been support for Uber. Since June, the stock has rallied off this level multiple times.

This happened because some of the buyers became anxious and impatient. They didn't want the sellers to go to other buyers, so they increased the prices they were willing to pay. Other impatient buyers do the same, and this puts the stock into an uptrend.

But now the support has broken.

Support breaks can be followed by moves lower. If the shares are trading below what had been support, it shows that the buyers who created the support have finished or canceled their orders. Either way, they have left the market.

And when buyers leave the market, it can set the stage for a move lower.

Sellers will once again be forced to reduce their prices and undercut each other if they want to draw buyers back in. This means the move lower in Uber may continue.

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