Upstart Holdings, UPST, has been pulling back on mostly lower volume towards its’ 50-day moving average over the past two weeks. This is a stock that caught my eye for a variety of reasons. First, this lending platform has AI technology that has the potential to radically change the consumer loan industry. This new and exciting innovation has allowed UPST to produce some phenomenal numbers, with both accelerating earnings and sales. Its’ last quarter was especially noteworthy with triple-digit earnings and sales growth. Moreover, fund ownership has more than doubled this year and management still owns over 20% of Upstart’s shares, both very bullish signs.
When I look at UPST’s chart, a few things stand out to me. First, the heavy volume gap up when earnings were announced in August was mostly likely due to intuitional buying coming in to purchase the stock. In addition, the weekly and monthly charts show fantastic action as UPST may be forming a William O’Neil style high tight flag pattern. I wrote about this in a previous blog post around the time I purchased UPST. It is important to note that UPST reports earnings this week. This is a stock that could easily move 20% in either direction so it is important to take that in account if you thinking about purchasing UPST or if you already own it like me. No matter how bullish I am on a stock, I never forget that risk management is the foundation of all successful trading.
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Full Disclosure: I currently own Upstart.
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