The chart on Electric Last Mile Solutions ( ELMS) looks like it is on its last leg. Shares have struggled for three months.
The few pops in the stock have been immediately sold. This is a de-SPAC, one I liked before it completed its merger. While I use the term liked, outside of the chart, I still like. That makes this a situation where you have to decide where your conviction lies.
There's no way to buy this chart. While not the cleanest bearish head-and-shoulders price pattern, a bearish pattern does exist. This right shoulder is more of a bear flag than right shoulder; however, the setup can be both, especially since both are bearish. Downside on a break of $7.20, points to around $6 per share. That's pretty ugly. The momentum and trend here are brutal, as well. The stock was rejected at the 21-day simple moving average (SMA) and we have bearish crossovers in both the MACD and Full Stochastics. It's looking likely the Parabolic Stop-and-Reverse (PSAR) will go bearish today as well. In short, even if you like the company fundamentally, now may not be the optimal day to enter.
But unlike many electric vehicle companies, ELMS is actually producing. The company is a pure-play commercial EV company with a focus on increasing the productivity of "last mile" delivery. The company delivered 1,000 units per terms of a binding purchase order from its strategic distribution partner, Randy Marion Automotive Group. The size isn't the biggest news here. It's the fact ELMS produced and delivered. Too many EV companies right now are betas, dreams, and non-binding orders.
The company also recently completed structural crash testing for their Urban Delivery vehicle. This allows "off-road" applications. No, not climbing rocky terrain or going mudding, but utility in places like airports and universities.
ELMS kicked off the second half of the year with over $200 million in cash and a goal to deliver 1,000 units. With this week's news, they hit on that delivery goal. It will be interesting to see how the distribution partnership with Randy Marion Automotive Group progresses. Additionally, ELMS launched a collaboration with Cox Automotive for fleet servicing and customer access to service centers. While not a direct bump in revenue, it helps in terms of awareness and should act as a referral source.
From a technical perspective, it is impossible to say now is the time to buy; however, from an execution standpoint, ELMS is actually delivering. It's one to watch. I had been stopped out earlier, but I will be looking for another entry if the price action improves.
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