NKLA stock: The Bulls Return for NKLA But For How Long?

·        Nikola stock: The price has been witnessing an uptrend, but can the bulls overcome the price rejection?

·       The company’s business is futuristic but it is currently facing losses in the trading account. 

·       The 50 EMA is looking forward to performing a cross over of the 200 EMA.

Established in 2014, Nikola Corporation emerges as a noteworthy player in the realm of sustainable transportation. Listed on the NASDAQ stock exchange, this Arizona-based company is dedicated to the production of electric and hydrogen-powered semi trucks. Under the guidance of CEO Michael L. and with the collaboration of over 900 employees, Nikola pursues its mission to revolutionize the transportation industry through innovative and environmentally-friendly solutions.

Brief financials and Key performance ratios

·  The Revenue for the quarter ending March 2023 was $11 Million, which is a 57% increase from the last quarter.

·    The gross profit for NKLA was reported as negative as per the last quarter, which is $-33M due to the high expenditure on Cost of Goods sold (COGS).

·      The net profit for NKLA stock for the last quarter was -$169M. 

Key Performance Ratios:

·       Gross margin of NKLA as per Trailing twelve months (TTM) is -229%

·       Operating margin of NKLA for TTM is -1,246%

·       The Net Margin of NKLA for TTM is -1,332%

·    The earnings per share of the stock is $1.72 which means the price-to-earnings ratio is negative.

·      Return on equity (ROE) for NKLA stock is -143% which is due to the negative net income.

·       NKLA stock is low on debt with a Debt to Equity ratio of 0.54. 

The Metrics have been calculated by financial statements, provided by macrotrends.net

NKLA Stock Previous Price Action and Forecasting

 The NKLA stock is in a constant downtrend because it made its all-time high in June 2020 at $79.7. NKLA’s 52-week high price is $8.98, which is more than 258% higher than the current price. 

NKLA’s 52-week low is $0.52. The average pricing for NKLA for the 52 weeks stayed at $2.52.

NKLA stock current Price and Forecast

Supports: The immediate support is at the level of $2.04 and the 2nd support will be at the level of $1.24, and both supports are protected by decent volumes in recent times.

Resistances: Resistance 1, which is at the level of $3.79, was formed long back in November 2022, when some rejection was seen. The 2nd resistance is at the level of $4.58. 

Indicators:

MACD: The MACD indicator has portrayed an intriguing narrative, marked by an extended tussle between the signal line and the MACD line that persisted since April 2023. A decisive turn of events occurred in June 2023 when the signal line triumphantly crossed the MACD line, signifying a shift towards a bullish trend signal. At present, both lines have positioned themselves above the 0.3 level, indicating a noteworthy shift in market sentiment.

RSI: The relative strength index after touching the level of 74 is seen to be going back to the mid-level of 54.

The EMAs: The 50 EMA, which is at the level of $1.83, is in a slight uptrend looking forward to breaking the 200 EMA, which is at the level of $2.41. 

Is NKLA stock worth buying?

Considering that the company is currently navigating its growth phase and has yet to achieve positive gross profit, an investment in this context might carry inherent risks. Nevertheless, it’s worth noting that the company’s operational focus is forward-looking, geared towards the future.

As for the stock’s trajectory, a resurgence of bullish momentum is evident. The Moving Averages (MA’s) are on an upward trajectory, complemented by indicators suggesting a potential uptrend in the short term. Should the price manage to breach the $3.79 level, it could serve as a signal for initiating buying actions. Conversely, a breach of the $1.24 level might signal an opportune moment for selling.

Conclusion

Established in 2014, Nikola Corporation has experienced significant shifts since its inception. Following a decline from its previous all-time high in 2020, the trajectory of NKLA stock has traversed a prolonged downtrend. However, a notable shift has recently emerged, hinting at the resurgence of a bullish trend. This transition is underscored by the ascending trajectory of the Moving Averages (MA’s), complemented by indicators signaling a potential uptrend in the short term. These evolving dynamics suggest a potential shift in market sentiment, as NKLA stock endeavors to reclaim a more favorable position after a period of sustained decline.

Technical

Support: $2.04, $1.24

Resistance: $3.79, $4.58 

RSI: 54 

50 EMA: $1.83

200 EMA: $2.41

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.