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I'm trying to understand how the price chart of a stock can be used to speculate on the price range in the coming weeks, months or years.

Looking at the price of a stock like UBER, there is a pattern that shows from September onwards, the price is going up and then goes down every month. Now in December 2019, the price is at a peak point and if I speculate on a chart like this, the price can go down in the next month. It is hard to speculate when there will be bounce and how many months the stock will take to reach the high value of $46.

Other than some optimistic news from the company, what data can be researched to raise the probability of an outcome that can say the price will rebound and will go above $35.

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    Answer to your first sentence: You can't.
    – Pete B.
    Dec 2, 2019 at 12:10

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Other than some optimistic news from the company, what data can be researched to raise the probability of an outcome that can say the price will rebound and will go above $35.

Easy. The fundamentals.

If the stock P/E ratio is let's say 2.5, and the company is in a sustainable and growing business and does not have heavy debt, you can be almost certain that the stock price increases.

If the stock P/E ratio is let's say 250, and the company is largely driven by hype and heavily indebted, you can be almost certain the stock price decreases.

I don't know about the debt of Uber, but I would not rate it as the most sustainable business. Some could see future growth, but I see future uncertainty and lots of hype.

Uber is not a profitable business, so P/E ratio is negative!

I wouldn't expect Uber stock price to increase.

Oh, and to further support my point: market cap of Uber is in the same league as the market cap of Toyota! One of them has done hard work for the past 40 years or so to improve the reliability of cars continuously without making them more expensive than the competition. The other is a company that just recently appeared in a huge cloud of hype, and it is not that clear why competitors could not appear and undermine their business.

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  • Good analysis. It should be noted that if Uber were to report a profit (and thus the P/E would turn positive) then the stock price would likely increase. Seeing how they "expect to be profitable by 2021" I wouldn't hold my breath
    – xyious
    Dec 2, 2019 at 22:37
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Trendlines are arbitrary lines subjectively placed on a chart which can be interpreted in a variety of ways. Much of their success comes from hindsight resulting in accurate predictions because you know what the future will be.

Technical analysis indicators provide information like support and resistance, trend, current momentum but they are a reflection of past price and/or volume movement and they predict absolutely nothing going forward. It's no more than looking in the rear view mirror to see where you have been. Why will they fail? You're asking TA to predict the future and that can't be done.

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Some, like me, find long time technical analysis as we see here about as relevant as horoscopes or i ching or other ways to do predictions.

There seems to be several camps of thought about this, I guess I am a ”fundamentalist”.

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