Rivian Automotive, Inc RIVN was surging almost 10% higher Tuesday after consumer price index data came in lower-than-expected, which increased investor hopes that the Federal Reserve will apply a pause on hiking interest rates when it makes its decision Wednesday.
The move higher also comes ahead of the EV maker's scheduled same-day sales event on Saturday, where customers can shop for an R1T at Rivian’s service center in Normal, Illinois.
Rivian’s boost higher caused the stock to negate a downtrend, which it’s been trading in since May 30. For a new uptrend to confirm, Rivian will eventually need to retrace to print a higher low, which could provide a promising opportunity for bullish traders looking for a point of entry.
An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.
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The Rivian Chart: Rivian negated its downtrend by rising above the most recent lower high, which was formed on June 9 at $14.86. The most recent lower low was printed at the $11.68 mark on April 26, and traders will want to see the stock reverse course from above that level for a new uptrend to confirm.
Rivian closed the trading session near its high-of-day, and the stock printed a bullish Marubozu candlestick, which could indicate higher prices will come on Wednesday. The second most likely scenario is that the stock trades sideways to consolidate Tuesday’s move by printing a possible inside bar, which would lean bullish for continuation later in the week.
Bullish traders want to see Rivian break up toward the $16 mark on Wednesday and then possibly consolidate near that level to form a bull flag pattern. Bearish traders want to see big bearish volume come in and knock Rivian down under $13.60, which would indicate the recent move higher was a bull trap and the downtrend will resume.
Rivian has resistance above at $15.80 and $21 and support below at $11.68 and the psychologically important $10 mark.
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