LYFT Lyft 15-Minute Chart; Positive Divergence; Tight Bands

Here is a chart for fun; the LYFT IPO that sputters along running out of gas. It has only been trading 2 days; call it 1-1/2 since its debut was delayed until munch time on Friday. There are no technicals available on the daily or weekly charts since Lyft Inc. just began trading. However, the 15-minute chart provides some interesting nuggets. A chartist will try to chart anything. You can see today's sharp collapse at the opening bell and then price stumbled sideways from there. The market makers are supporting that 69 level. LYFT falls below its offering price at 78 making it a sad clown.

LYFT ends the day crashing -12%. That negativity places a dark cloud above the new ride-sharing IPO. Price was unable to move above its 20 MA resistance and closes at 69.03. Look at those tight bands (pink). A huge price move is coming in this 15-minute time frame. The indicators are all possie d so the expectation would be for a bounce. LYFT may pop tomorrow and could form an island reversal if price went higher to 75 then gaps-up to 78 and higher (back up through the gap). Otherwise, if price moves higher, it may simply fill the gap.

Lyft is a pure play on North America. It is more attractive than Uber but that is not saying much. Uber has not yet come to market so Lyft is lucky it got there first although the debut is sputtering. Uber has a larger geographic breadth and pimps its Uber Eats food-ordering company.  Uber is also investing in long-term projects such as autonomous cars; they have their fingers in too many pies which means lots of money is probably being wasted. Analysts and traders are disappointed with LYFT's price action and worries increase over their ongoing losses.

Keystone is not a fan of these ride-sharing companies. Young ladies better make sure they know who they are getting into a car with if they use these services. Always travel in groups of at least two or more. The young folks are into this sharing-stuff economy. Humorously, who wants to sit in someone else's stink? Keystone is a flower-child from the 1960's and 1970's and remembers what it's like to think you have all the answers; in time, you will come to realize you do not even know the questions. Gen Z's and Millennial's will learn that share means different things to different people.

The business model on the ride-sharing companies appears flawed. If you are an Uber driver, why would you not tell your rider that you can take care of him/her again and for a couple bucks cheaper if they will call and pay him directly. Thus, Lyft and Uber will not benefit from finding a customer; instead the driver can take care of things on the side and pocket the dough for himself. I am sure there are protections that Lyft and Uber have in play to prevent this stuff but people will find a way around it. This behavior would be expected to increase dramatically once the recession hits. A cash economy will flourish when times get bad in the months ahead which will screw the local, state and federal governments out of much-needed tax money.

Keystone does not own LYFT and did not plan to play it, however, considering those tight bands, a long might be bought tomorrow morning for fun. A potential play is a long entry at 68-69 at the open and hold that for only a few hours; definitely sell it tomorrow as well (day trade). Perhaps that positive divergence will kick price higher and the bands will squeeze it higher. If it continues dropping, it may become more attractive as long as the possie d remains in place.

As mentioned many times, however, tight bands do not predict direction they only predict that a big move is about to occur. Choose your poison; down to the bottom rail of the channel at 62-63 or upside explosion to 75 perhaps 78. The possie d is bullish. Remember this is an extremely short time frame, 15-minutes, and currently only the territory of experienced day traders. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.