LCID drops 14% to three-month lows below $29
- LCID stock falls again on Thursday as Wall Street prolongs post-Fed pain.
- Lucid Group’s stock is now down 10% last week.
- LCID shares are still up 56% in the past three months.
Update, January 28: The LCID stock price rout extended into the third day in a row as the bears eroded 144.10% of its value on Thursday. Lucid’s stock price hit a three-month low of $28.39 before recovering to $28.70 at the close. Selling pressure intensified at the electric vehicle (EV) maker after stops were triggered on breaching the $30 psychological level. Traders shrugged off upbeat results from electric vehicle leader Tesla Inc. as hawkish Fed sentiment continued to cast its shadow over Wall Street stocks. The Nasdaq Composite Index (NASDAQ) led the declines among the three major US indices, losing 1.40% on the day.
Shares of Lucid Group (LCID) followed the established theme so far this year and slid on Friday as high-growth names continued to fall. Admittedly, many of these high-growth names are falling from all-time highs, so this correction is overdue and could actually prevent a real bubble collapse. Electric vehicle (EV) stocks were one of the best performers last year, so they understandably suffered from shifting risk appetite in 2022. While Tesla (TSLA) as a industry leader is suffering, it has at least revenue and shipments to pull back. For other EV stocks such as Lucid and Rivian (RIVN), the early stage of development means investors are less forgiving in the current climate.
Lucid Group Stock News
Lucid got some form of relief rally last week as a major milestone was reached. The lock-in period for early-stage investors passed without any major selling pressure. The PIPE transaction block has expired, but in reality, this expiration only affected Lucid’s first long-term backers. The expectation would not have been as high for these holders to sell compared to some of the later investors who may have sought to quickly turn away from the PIPE deal. Remember that the PIPE deal was down to $15, so there’s plenty of profit. However, the Saudi Public Investment Fund (PIF), one of Lucid’s early backers, is typically a multi-year holder of companies it invests in, and Lucid is still in its infancy.
However, that doesn’t mean all is well. Lucid is caught up in the risk aversion sweeping the markets right now, and we don’t see that changing in the near term. More losses may be unavoidable. The electric vehicle sector will be in the spotlight again later this week when Tesla reports results after Wednesday’s close. Tesla has already reported delivery numbers, so revenue will be watched closely. This will set the tone for risk appetite in the EV space for the next few weeks.
Lucid Group Inventory Forecast
We remain bearish and expect further declines this week for LCID stocks. Last week’s relief rally on the lockout expiration has passed, and this week should bring a new focus on high-growth stocks with limited earnings. Technically, the picture looks precarious.
There is already a bearish series of lower highs in place, with the latest peak at $47.59. This is the bullish pivot and staying below means a break lower is likely. Key support is at $35.60. A break of this level and there is a huge gap in volume down to $27. This could see an acceleration of losses. At least around $25 is a strong volume-based support zone with the control point at $24.56 since the IPO.
Lucid (LCID) Group Chart, Daily
Update: LCID is down 14.55% heading into the US close, changing hands at $28.55 per share. Wall Street managed to open in the green and post substantial intraday gains, boosted by buoyant US growth. Fourth-quarter GDP surprised investors by printing 6.9%, much better than the already bullish 5.5% expected. However, and once the dust settled, stocks took a turn for the worse, hurt by the US Federal Reserve’s hawkish stance. The Nasdaq Composite is among the worst performers, down 209 points so far.
Update: Lucid (LCID) stock fell for the second day in a row on Wednesday, losing 5.78% to settle at $33.41. The stock followed heavy losses in electric vehicle (EV) leader Tesla Inc., which fell 6%, despite the fourth quarter earnings beat. The pessimistic tone of Wall Street indices on Fed hawkishness also added to the pain for LCID.
Update: Lucid (LCID) stock closed at $33.41 on Wednesday as continued woes hit the EV name. Growth stocks are still in the bulls’ sights and with Tesla beating earnings but citing growing supply chain issues, the sector may not get the catalyst it was hoping for. Tesla shares fell 6% after hours trading, before recovering half of that loss at the time of writing.
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