Two EVs making a move

Investments in EV stocks have been a disaster. The only stock that has done wonders is Tesla. The big question is, how should we see the rise in two EV stocks this month? Does this represent a trading opportunity?

Rivian RIVN

RIVN stock has consistently disappointed in 2024, even after getting bullish news. On June 26, the stock exploded on the news that Volkswagen would invest up to $5 billion in Rivian over the next two years. Generally, such news is a buying opportunity. See the rally from point 1 to Point 2. Usually, the base of the Gap becomes the support zone. But see the chart below, which shows how the stock quickly gave up the gains and finally settled at $10. 

It was a bad trade and a bad start. Then, on Nov 13, RIVN announced a joint venture with vehicle manufacturer Volkswagen Group, but the stock surged and quickly sold off to $10. This time, traders were not willing to buy the bump. A high of $13 became the new resistance [Point 1 in the chart below]

But then Rivian kept on getting +ve news. The next trigger came on Nov 27 with the news that it has received conditional approval for a loan of up to $6.6 billion from the U.S. Department of Energy to build the electric vehicle maker’s production facility in Georgia. Now, this news helped the stock clear the $13 hurdle. The stock rallied to $15.5, pulled back to 20 dma, and bounced from the $13 level on Friday. This makes the stock a BUY.

Why is Lucid Motors LCID rallying?

LCID has been a disaster. The only thing that has been +ve about the company is the backing of the Saudi Arabia Public Investment Fund. The rumors are that LCID is also exploring partnerships like RIVN. And it has created a turnaround situation in the stock.

Historically, the stock has been dumped by traders on every rally. See how the rally from 1 to 2 unfolded, and the stock then tumbled from 4.5 to $2 levels. But see how the stock has staged a comeback and now trading above 200 dma. If the stock holds $2.9 on a pullback, then a big rally can happen in the stock.

Will I buy? Nope not yet but keep a close eye on what might happen next. I am more comfortable buying RIVN.

The Winners

Chart Source: Finviz.com

Please do your own due diligence before trading. Nothing here or in the newsletters constitutes financial advice. These are just my views based on my experience.