Key Takeaways
- Lucid shares jumped 36% Thursday on news the EV startup is partnering with self-driving software maker Nuro and rideshare giant Uber Technologies to bring a new group of robotaxis to Uber’s platform.
- After consolidating just below the 50-day moving average in recent weeks, the stock staged a volume-backed breakout in Thursday’s trading session, potentially setting the stage for follow through buying.
- Investors should watch important overhead areas on Lucid’s chart around $3.60, $4.35 and $5.30, while also monitoring an key support level near $2.50.
Lucid Group (LCID) shares surged Thursday on news the EV startup is partnering with self-driving software maker Nuro and rideshare giant Uber Technologies (UBER) to bring a new group of robotaxis to Uber’s platform.
The deal will see at least 20,000 self-driving Lucid vehicles enhanced with Nuro’s autonomous driving software added to Uber’s network over the next six years in exchange for Uber investing hundreds of millions of dollars in both companies.
Following the partnership announcement, analysts cautioned that the companies may face challenges scaling as fast as Uber wants, pointing out that Tesla and Google parent Alphabet’s (GOOGL) autonomous vehicle company Waymo have scale and technology advantages over Lucid and Nuro. Last month, Tesla (TSLA) launched its own robotaxi service in Austin, Texas as competition in the self-driving taxi market accelerates.
Lucid shares jumped 36% to close Thursday’s session at $3.12. With today’s pop, the stock is up nearly 60% from this month’s low but still 18% lower over the past 12 months, weighed down by heavy losses, capital raises, and a string of analyst downgrades.
Below, we take a closer look at Lucid’s chart and identify price levels that investors will likely be watching.
Volume-Backed Breakout
After consolidating just below the 50-day moving average in recent weeks, Lucid shares staged a decisive breakout in Thursday’s trading session, potentially setting the stage for follow-through buying. Importantly, the pop occurred on the highest volume since the company debuted on the Nasdaq in July 2021, suggesting conviction behind the move.
Today’s breakout also raises the possibility that the stock has completed a triple bottom, with three distinct troughs forming at roughly the same level on the chart between November and July. Meanwhile, the relative strength index confirms bullish price momentum, though the indicator has crossed into overbought territory, increasing the chances of short-term profit-taking.
Let’s identify three important overhead areas to watch on Lucid’s chart and also point out a key support level worth monitoring.
Overhead Areas to Watch
The first overhead area to watch sits around $3.60. This area on the chart could provide selling pressure near the prominent January and February peaks, which also closely align with a brief countertrend upswing in late September last year.
Buying above this area could see the shares climb toward $4.35. The price may encounter resistance at this level near notable peaks that formed on the chart last July and August.
Further bullish momentum could drive a rally to $5.30. Investors who have bought at lower prices may decide to lock in profits in this region near the major December 2023 swing high that emerged during a steep downtrend in the stock.
Key Support Level Worth Monitoring
If Lucid shares retrace after today’s strong move, investors should keep a close eye on the $2.50 level. This location would likely attract buying interest near the 200-day MA and a trendline that connects a series of corresponding price action on the chart stretching back to last year’s June swing low.
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As of the date this article was written, the author does not own any of the above securities.
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