Given the way that we may be in a stop - start lockdowns for the pandemic for quite some time, the Uber share price looks to be one of the more difficult ones to make a call on. This is over and above it being in an already difficult environment. In fact, the fundamental conundrum that is the Uber share price can be made less complicated by looking at the two businesses it is most famous for, hail-riding and food delivery, separately.
For instance, like many leading stocks in February, just before the pandemic struck, Uber shares were on a high. Indeed, they were closing in on their all time peak at $47, achieved the previous year in the immediate aftermath of their IPO.
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COVID-19’s impact on Uber shares
But everything changed for investors as soon as the gravity of the COVID-19 crisis struck home, with the Uber share price more than halving. This echoed general stock market declines. However, it was clear that close proximity between passenger and driver in an Uber, over and above the new trend for work from home was going to be a severe headwind.
Delivery boost to Uber shares
In contrast, it was intuitive that a big winner in the social distancing / lockdown era would be food delivery, as consumers cut down venturing from their homes. What has been interesting in terms of the Uber share price is the way that from the May to the beginning of November there seemed to be something of a balance between the bearishness associated with hail riding and the bullishness of food delivery. This could be explained by the uncertainty regarding a possible second wave of COVID-19, as future lockdowns.However, led by lockdowns in Europe, investors had the answer that it will be the food delivery space in the ascendency over the near term at least.
Uber share price breakout
What has been interesting though, is the way that the break higher for Uber shares on a deepening of the pandemic suggests that the market now regards the company as a COVID-19 winner. This point is underlined by the way Uber shares are now fast approaching its $47 all time high level, gapping up off the back of Q3 earnings. The Uber share price was also given a post by extra stand alone positive newsflow. This included California allowing ride-hail and delivery businesses to classify drivers as independent contractors not employees, as well as the recent London license appeal win.
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1. Register for an account or log in to your existing account
2. Open MT4 either on your desktop or mobile
3. Search for Uber shares in the market watch or symbols window
4. Choose your position size
5. Hit buy or sell, and then confirm the trade
Uber shares Q3 update
But as far as Uber shares are concerned it looks to be numbers which spell out the balance of the business: at the Q3 stage. $8.55bn for eats and $5.91bn on rides. As things stand it can be said that the Uber share price is well hedged by the company’s two main businesses. The revenue bias towards Eats over Rides does nevertheless, give the bias in favour of the COVID-19 environment, the one we are currently in.
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Uber share price: daily chart
All of this explains why we have a break to the upside on the Uber share price daily chart. The prospect is that we could see Uber shares hit the top of a rising trend channel as high as $60 on a 1-2 months time frame. This technical target could be delivered, especially while there is no break back below recent chart gap support at $40.
Risk management
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