Rivian Shows 'Green Shoots' in Its Price Action

Bottoming action in the EV maker's shares offers a glimmer of promise.

EV maker Rivian Automotive (RIVN) was downgraded by another sell-side firm Wednesday as they see "margin risks." Let's get out some socket wrenches and take a closer look at the charts and indicators to see if the stock is all sold out at this point. 

In this daily bar chart of RIVN, below, I can see some green shoots in the price movement. The shares have been in a downward trend the past year but the length of each declining phase has become shorter in terms of dollars lost and in terms of the time period being weak. The shares trade below the declining 50-day moving average line and below the declining 200-day moving average line.

The trading volume shows heavier turnover the past three to four months. Heavier volume at a potential price low suggests a possible change in ownership from weak hands to stronger hands or investors with deeper pockets.

The On-Balance-Volume (OBV) line declined to a low in March and has not made a lower low in April. The month is not over but at this point it is a glimmer of improvement. The 12-day price momentum study shows higher lows from December to March even though prices made lower lows. This is a bullish divergence as the pace of the decline is slowing. This bullish divergence can at times foreshadow an upside reversal. We'll see. 

 

 

In the weekly Japanese candlestick chart of RIVN, below, I can see more subtle clues of promise. The recent weekly candles are all small real bodies, spinning tops or even doji patterns. All of these candles suggest a balance between bulls and bears.

 

The weekly OBV line shows a slightly higher low in April versus March and the 12-week price momentum study shows a slowing in the decline and large bullish divergence. 

 

 

 

In this daily Point and Figure chart of RIVN, below, I can see that the shares have reached a downside price target in the $13 area. A trade at $14.13 should start to improve this chart. 

 

 

 

In this weekly Point and Figure chart of RIVN, below, a price target of $4 is indicated. 

 

 

 

Bottom-line strategy: One of the clues I look for at bottoms is if a stock or commodity does not decline on bearish news. Let's check on the price of RIVN at the close of trading Wednesday.

 

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