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UPST May Be Forming A High Tight Flag Pattern

Of all the bases categorized by William O'Neil, the most coveted yet challenging is undoubtedly the high tight flag pattern. This is a rare base that is reserved for only the most explosive stocks. Upstart Holdings seems to fit this description quite well. The consumer loan company first came across my radar earlier this year due to its' strong earnings and sales growth. Upstart has continued to deliver the goods with triple-digit earnings and sales in its' most recent quarter.

It is important to note that management currently owns 25% of Upstart's shares, and UPST has seen an increase in fund ownership over the last four quarters. Clearly, those with the most knowledge of this company like what they are seeing. Moreover, Upstart is in the consumer loan industry group which has been one of the best performing spaces recently. This makes sense given our current low interest rate environment. What's most impressive to me is Upstart's chart. After finding support near the $120 range, UPST ran up rapidly to well over $300 in less two months. It has been correcting over the last two weeks near its' 20-day ema which is a constructive sign, especially since it has been drastically outperforming the S&P 500 over the last few months. I will be looking to buy UPST should it break out in the coming weeks.


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