You Ask, We Analyze: Why Upstart's Stock May Not Be Finished On Its Trip To The Moon

On Tuesday evening, Benzinga asked its Benzinga Pro community which tickers they’d like analyzed. From the replies Benzinga selected this ticker for technical analysis.

Pro user Mike_November wanted to see a technical analysis on Upstart Holdings, Inc UPST.

Upstart reached a new all-time high of $401.49 on Monday despite BofA downgrading the sock from Buy to Underperform and raising the price target from $200 to $300. The AI lending platform has soared almost 200% higher since Aug. 10 and doesn’t look to be ready to slow down yet, however.

Upstart has interesting underlying statistics that may make it attractive to retail traders:

• Small Float: Upstart has a float of just 47.68 million shares.
• High Ownership Levels: 72.31% of Upstart’s shares are locked up by insiders and institutions, with insiders owning 15.56% of the float and institutions a whopping 56.75%.
• Short Interest: 3.8 million shares of Upstart are held short, meaning 7.26%. Although the number is down from 3.11 million in August it’s still enough to give the stock some squeeze potential.

See Also: Upstart Reveals Earnings Setup

The Upstart Chart: Since Aug. 10, Upstart has been trading in a strong uptrend on the daily chart, making fairly consistent higher highs and higher lows. Between Sept. 23 and Oct. 4. Upstart entered into a short downtrend before skyrocketing up 42% higher, which created an ascending trendline that can now be used as support.

The 42% rise, paired with the recent consolidation has settled Upstart into a possible bull flag, with the pole created between Oct. 6 and Oct. 15 and the flag formed on Monday and Tuesday. If the flag is recognized and Upstart breaks up from the pattern on high volume, the stock could run toward the $516 level in the future, which is the measured move of the bull flag.

The recent consolidation has helped to drop Upstart’s relative strength index (RSI) back down below the 70% level. When a stock’s RSI reaches or exceeds the level it is considered overbought by technical traders and can be a sell signal. Upstart’s RSI reached over 77% on Friday, which indicates consolidation was needed.

There is a gap below on Upstart’s chart traders should be aware of because gaps on charts fill about 90% of the time. Upstart’s gap was left behind on Aug. 11 and falls between the $140 and $156 range.

Upstart is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading well above the 50-day simple moving average, which indicates longer-term sentiment is bullish.

• Bulls want to see continued consolidation within the bull flag to further cool the RSI and then for big bullish volume to come in and push Upstart up through the flag. There is no resistance above the all-time high in the form of price history.
• Bears want to see big bearish volume come in and drop Upstart down through a support level at $346 and for bearish momentum to push the stock toward the ascending trendline. If the stock can’t hold the trendline as support, it could retrace toward the $294 level.