Blue Apron Holdings, Inc. (APRN) shares moved 25% higher during Tuesday's session after the company announced that plant-based proteins from Beyond Meat, Inc. (BYND) would be included on its "Signature Two-Serving Plan" beginning in August. Blue Apron's new recipes featuring Beyond Meat include caramelized onion and cheddar Beyond burgers with garlic green beans and jalapeño and goat cheese Beyond burgers with corn on the cob.
Despite the Beyond Meat optimism, many analysts remain bearish on Blue Apron's future. Morgan Stanley slashed its price target back in June to just $6.00, saying that the meal kit provider's fundamentals were crumbling and that competition would continue to pressure sales. While first quarter earnings beat expectations at a three-cent loss, revenue slipped nearly 30% to $141.89 million, missing consensus estimates.
Beyond Meat's shares have been a much stronger performer. Since the company's May IPO, shares have more than doubled from $66 to $172, as investors bet that fast food chains will line up to add its plant-based burgers to their menus.
From a technical standpoint, Blue Apron stock extended its rebound from lows reached in late June to its 50-day moving average at $9.43. The relative strength index rose toward overbought levels with a reading of 62.77, while the moving average convergence divergence (MACD) extended its bullish trend toward the zero line. These indicators suggest that the stock could see more upside before experiencing consolidation.
Traders should watch for a breakout from the 50-day moving average toward reaction highs of around $11.00 over the coming sessions. If the stock breaks out from those levels, traders could see a move toward trendline resistance and the 200-day moving average at $15.58. If the stock fails to break out from the 50-day moving average, traders could see a move lower to around $8.00 over the coming sessions.
The author holds no position in the stock(s) mentioned except through passively managed index funds.