In an Executive Decision segment of "Mad Money" Tuesday, host Jim Cramer spoke with Peter Rawlinson, CFO and CEO of Lucid Group (LCID) , an electric carmaker that saw its stock soar on Tuesday after the company received the Motor Trend Car of the Year award.
Rawlinson said Lucid's first vehicle, the Air, currently has more than 17,000 reservations and the Edition R has an EPA-certified range of 520 miles, the longest range of any electric vehicle.
When asked about the company's stock valuation, Rawlinson said Lucid should be valued as a technology company and not an automaker. Lucid designs and manufactures 100% of its vehicles in-house. Rawlinson noted that it is alone with Tesla (TSLA) in that regard.
Lucid's current production line in Arizona is tooled for 34,000 units per year. Rawlinson said once the plant is fully expanded it quickly will support up to 400,000 vehicles per year.
Let's check out the charts to see if they are tooled for higher prices.
In this daily bar chart of LCID, below, we can see that prices have soared nearly three-fold from early September. That's eye-popping. LCID is trading above the rising 50-day and 200-day moving averages. The 50-day line just crossed above the 200-day line for a bullish golden cross. The On-Balance-Volume (OBV) line has been steady to higher (since early September) the past year, telling us that buyers of LCID have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of LCID, below, we can see some big and dramatic moves in price. It is hard to miss the huge bearish engulfing pattern back in February. Recently the candles have been long white bars with no upper shadows, which are very bullish. The slope of the 40-week moving average is bullish and the trend of the OBV line and the MACD oscillator are bullish, too.
In this daily Point and Figure chart of LCID, below, we can see a potential upside price target in the $76 area.
Bottom line strategy: Risk is the problem with a purchase of LCID, in my opinion. What do I mean? It is easy to buy a stock -- just enter a market order. The hard part is deciding where one might be wrong. Personally, I like to suggest a stop-out point below a band of potential support or below a moving average line or sometimes a trend line. With the chart of LCID (above) I would need to risk to $40 for a purchase at $55. The current upside price target is $76. That means risking $15 or so for a possible rally of $21. That's not my kind of math. Maybe a better entry point will present itself. Stay tuned.