Since reporting its earnings on February 28th, 2022, Lucid (NASDAQ: LCID) stock has declined by roughly 10%. Previously the Electric Vehicles (EV) manufacturing company provided guidance for production delivery in the 20,000 range, to revise it down to 14,000 during the earnings call.
For high-flying EV stocks, any sign of bad news is heavily punished by investors who are betting that their favorite EV play will pan out handsomely. Most investors disregarded the fact that lower guidance was due to supply chains disruption and higher upfront costs caused by the Russian invasion of Ukraine.
How is the stock performing?
LCID closed yesterday’s trading day, 29th March 2022 with a price of $27.29. Some chartists would deem the close a Marubozu candlestick pattern, which basically predicts a move to the upside. With the stock trading between its 20 and 50-day Simple Moving Averages, any break above would be seen as a very bullish pattern and continuation of the runup.
Such behavior from the stock after it has been descending from the November 2021 highs represents positive developments for traders looking to jump on once the stock starts climbing back up again.
On Wall Street, the sentiment continues to be neutral regarding the stock with average price targets remaining at $38. If the price would reach this average estimate from its current $27.36 we would see a 38.99% upside for the stock.
Some catalysts that could push LCID stock
Lucid recently expanded its presence in Canada by opening its newest Studio location to push the brand presence there. Collaboration with Electrify Canada to offer complimentary charging will further sweeten the deal for potential drivers of Lucid cars.
It seems also that LG Energy Solution is coming into Arizona to build a battery plant that will count Lucid, among others, as their customer. This news is in line with the long-term aspiration of the company as well as potential investors in the stock.
EV and car manufacturers, in general, are struggling with supply chain issues, due to geopolitical tensions so Lucid is not an isolated case. Short-term pain that is felt in the stock could reverse if the commodity prices come down from their highs.
Oil prices spiking, works in favor of the stock but long-term it could be damaging since oil prices are correlated to other prices along the supply chain.
Finally, it seems that the stock is setting up nicely for an entry point, especially for investors who are potentially eyeing a long-term position.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.