Nikola's Gains Since April Could Be in Jeopardy

The charts and indicators of NKLA look bearish.
Stocks quotes in this article: NKLA

Trying to explain the stock market's movements, Jim Cramer said that speculative stocks such as Nikola Corp. (NKLA) are also weighing on investors' minds. Let's check out a couple charts of this company that designs and plans to manufacture hydrogen-electric trucks.

In the daily Japanese candlestick chart of NKLA, below, we can see that the shares soared from April to early June. Prices have been working lower and bouncing and working lower since early June. The slope of the 50-day moving average line is negative and prices are testing the rising 200-day moving average line.

The trading volume has been heavy this month and the On-Balance-Volume (OBV) line has been up and down and up and down. Despite the jiggles in the OBV line, prices have declined so far this month. The Moving Average Convergence Divergence (MACD) oscillator is bearish as it is pointed down and below the zero line.

 
In this daily Point and Figure chart of NKLA, below, we can see a potential downside price target around $4. Ouch. 
 
 
 
 
Bottom-line strategy: The shares could bounce at any point but the charts and indicators of NKLA look bearish with a downside price target of only $4.
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Automotive | Mad Money | Electric Vehicles

More from Stocks

Jim Cramer: I'm Worried About the Crypto-World

Jim Cramer

If you own crypto of any form I think you should, if you have big gains, take some off the table.

Palantir Has Hammered Out a Base Pattern to Support Further Gains

Bruce Kamich

Here's our latest technical strategy on PLTR.

I'm Working on Some Dip Buying

James "Rev Shark" DePorre

With the indices finally joining the party to the downside, we have the potential for some bottoming action.

This Portfolio of Past Losers Remains Solid but Is Running Out of Steam

Jonathan Heller

The 2021 Tax Loss Selling Recovery Portfolio gave up ground over the last month yet continues to outperform key indices.

Use Available Weakness to Go Long Builders FirstSource

Bruce Kamich

Let's review the charts and indicators.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight