Shares of Nikola Corporation (NKLA) , the electric-hydrogen vehicle name, are surging Tuesday. We reviewed the charts of NKLA on Sept. 22 and concluded that, "The shares could bounce at any point but the charts and indicators of NKLA look bearish with a downside price target of only $4." Prices soon bottomed out in the upper teens and have surged sharply higher in recent days.
Let's review the charts and indicators again to see what has changed.
In the updated daily Japanese candlestick chart of NKLA, below, we can see that the shares have broken the downtrend from early June. Prices have rallied in recent days and have almost doubled from the November lows. NKLA is above the declining 50-day moving average line and above the rising 200-day moving average line. These moving averages are probably not of importance to the group of traders who are rushing into this stock.
The trading volume is important and notice that while it has increased through November so far it is below the level of turnover in September. The On-Balance-Volume (OBV) line has managed to climb to a new high to confirm the price gains as buyers of NKLA have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator turned bearish in the middle of July but has now crossed back above the zero line for a new buy signal.