Uber Technologies, Inc UBER and DoorDash Inc DASH were trading more than 5% and 2% higher, respectively on Monday, in tandem with the general market, which saw the S&P 500 gain slightly.
Piper Sandler analyst Alexander Potter upgraded Uber from Neutral to Overweight on Monday and raised the price target from $31 to $33.
In contrast, the firm downgraded Dash from Neutral to Underweight and dramatically lowered the price target from $227 to $40.
Potter recommended pairing the two food-delivery associated stocks against each other, suggesting traders and investors could long the former and short the later.
The analyst saw near-historical high vehicle pricing benefitting ride-sharing stocks but believed DoorDash would continue to see heavy recessionary pressured into 2023.
Although Potter thought Uber’s revenues could see some of the effects of consumers ordering out less, with 36% of Uber’s revenues coming from food delivery, the company had “superior scale,” the analyst said.
From a technical standpoint, Uber appeared stronger than DoorDash because Uber was trading in a confirmed uptrend, while DoorDash was trending within a downtrend.
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The Uber Chart: Uber regained the 200-day simple moving average (SMA) as support on Monday, which was a good sign for the bulls. Bullish traders would want to see the stock hover near the area for a period of time if Uber lost steam to move upwards on Tuesday.
Uber was trading in a confirmed uptrend, with the most recent higher high formed on Jan. 4 at $25.97 and the most recent higher low printed at the $25.40 mark on Friday. On Monday, Uber shot up above the most recent higher high and the high-of-day could be the next temporary top.
If Uber closed the trading day with a long upper wick, the stock could trade lower or sideways on Tuesday. If Uber closed the trading day near the high-of-day, a bullish kicker candlestick could print, which suggested higher prices could come on Tuesday.
Uber had resistance above at $27.69 and $29.17 and support below at $26.23 and $23.68.
Also unlike Uber, DoorDash was trading below the most important moving averages, with the lower time frame moving averages trendline under the higher time frame averages, which was bearish.
Bullish traders wanted to see DoorDash reverse course by printing a bullish reversal candlestick, such as a doji or hammer candlestick, above $46, which could indicate the downtrend had come to an end. Bearish traders want to see big bearish volume drop DoorDash under that level, which would confirm the downtrend is intact.
DoorDash had resistance above at $50.20 and $54 and support below at $46.25 and $41.37.
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