Trading Strategies For Lyft Stock Before And After Q4 Earnings

Lyft, Inc LYFT is set to print its fourth-quarter earnings after the markets close Thursday.

The stock was sliding over 2% heading into the event but has surged almost 75% since Dec. 28, when Lyft reversed course into a steep uptrend.

When the mobility service and ride-share company printed mixed third-quarter results on Nov. 10, the stock plunged about 23% the following day to continue in the downtrend in which the stock had been trading since Aug. 8, 2022.

For the fourth quarter, analysts estimate Lyft will print earnings of 13 cents per share on revenues of $1.16 billion.

From a technical perspective, Lyft looks set to trade higher due to several bullish signals that have developed on the stock’s chart. Of course, holding a position in a stock over earnings can be akin to gambling, as stocks can rise following an earnings miss and fall after reporting a beat.

Options traders, particularly those who are holding close-dated calls or puts, take on extra risk because the institutions writing the options increase premiums to account for implied volatility.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Lyft Chart: On Wednesday, Lyft topped out at the $18.36 mark and fell intraday to print a bearish engulfing candlestick, which indicated lower prices were likely to come on Thursday.

On Thursday, Lyft opened slightly higher but fell intraday.

• On Jan. 31, the stock regained the 200-day simple moving average (SMA) as support, which indicated the bull cycle could be on the horizon. The stock hasn’t fallen to back test that level as support, however, which could take place if Lyft suffers a bearish reaction to its earnings print.
• If that happens, bullish traders will want to see Lyft form a bullish reversal candlestick, such as a doji or hammer candlestick, above the 200-day SMA, which could indicate healthy price action and a resumption of a bull cycle. Bearish traders want to see Lyft slip through the 200-day, which could indicate the recent bullish price action was a bull trap.
• If Lyft climbs slightly higher to form a lower wick on Thursday, the stock will print a hammer candlestick, which could indicate higher prices are in the cards for Friday. If the stock closes near the low-of-day, Lyft will print a bullish Marubozu candlestick, which could indicate there’s more downside ahead.
• Lyft has resistance above at $18.66 and $21.34 and support below at $14.56 and $12.36.

Photo via Shutterstock.