Zipcar (ZIP)

Zipcar Inc. (ZIP) was upgraded by Goldman Sachs on November 20th along with an $8.75 price target.  The closing price of ZIP on the 19th was $6.36 which means the upgrade represented 37.5% potential upside.  The problem is that along with a gap up the morning of the upgrade the stock rallied the next two days to reach a high during intraday trading on 11/13 of $8.64.  With Goldman’s target essentially reach, how has this beaten stock acted?  Pretty well I think.  The stock has flagged on lighter volume and considering the recent pressure the stock has faced it could have seen much more selling on the Goldman pop but instead it has digested.

Unless Goldman is thinking about coming out and re-evaluating that target already (note the sarcasm/skepticism) then ZIP will need to find additional catalysts but I applaud Goldman for looking at a beaten up name.  Often I feel analysts step in way to late and this could be a case where down the road the “Johnny come late-lies” might step into the name.  Please also do not consider this a value stock even though it is down from the $30 region but it also has about $1.62 in cash, is profitable and technically is off a divergent low.

I think this is a name that can provide a trade and even could look to target the bug juicy upside gap over $10.  For quick traders you have a clear pattern which you can look to enter inside or wait for a break and below yesterday’s low of $7.80 is the level to say its over.  Longer tern traders could possibly hold out to see the MACD recycle more which may or may not lead to much lower prices but will provide a more clear pattern.  Also the 20 and 50 day MA’s (green & blue) can be levels to trade against if you willing to give it more room.