Shares of Lucid Motors (LCID) soared sharply on Friday on rumors that Saudi Arabia's Public Investment Fund is considering buying a remaining stake in the luxury electric vehicle startup.
Let's check out the charts and indicators.
In this daily bar chart of LCID, below, I can see that prices quietly moved higher in January until Friday's huge rally on very high trading volume. Prices made a very large high/low range but closed in the middle of the range - neither bullish nor bearish.
LCID rallied above the 50-day moving average line and the slower-to-react 200-day moving average line. The slopes of both of these math-driven indicators are still negative.
The On-Balance-Volume (OBV) line has climbed in January but its next move is up in the air. The Moving Average Convergence Divergence (MACD) oscillator is now back above the zero line.
In this weekly Japanese candlestick chart of LCID, below, I see a very volatile picture. Prices can rally or decline sharply. In the most recent week the price of LCID soared but left a large upper shadow telling us that traders rejected the highs. Prices are below the declining 40-week moving average line.
The weekly OBV line is weak as is the MACD oscillator.
In this daily Point and Figure chart of LCID, below, I can see an upside price target in the $39 area but there is a band of resistance between that price target and current prices.
Bottom line strategy: Until very recently
the charts of LCID looked bearish. Trying to trade buyout rumors is not something I want to actively get involved with as the decisions will be made far away in some wood-paneled room on a high floor. Way above my pay grade.
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