Canoo Gains Ground And Recently Breaks Out Of Wedge Pattern

Canoo Gains Ground And Recently Breaks Out Of Wedge Pattern

Canoo Inc GOEV shares are trading higher Wednesday, likely in continuation after the electric vehicle company announced it will begin to accelerate its advanced manufacturing production in the U.S. before the fourth quarter.

Canoo was up 1.44% at $10.62 Wednesday afternoon at publication 

Canoo Daily Chart Analysis

  • The stock looks to have broken out of what technical traders call a falling wedge pattern and has been flying higher since the announcement was made.
  • The price got pinched between narrowing highs and lows and was able to break above resistance after a period of trading within the pattern. The break of resistance shows that the stock may be seeing a possible trend change.
  • The stock trades above both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock is likely in a period of bullish sentiment.
  • Each of these moving averages may hold as a possible area of support in the future.
  • The Relative Strength Index (RSI) has been pushing higher the past couple of months and now sits at 71. This shows the stock has been seeing an increase in buying pressure and the RSI now sits in the overbought range where there are many more buyers than sellers in the stock.

What’s Next For Canoo?

Bullish traders are looking to see the stock continue to break out and push higher. Eventually, the stock will cool off and will be unable to continue pushing upwards, and when this happens bulls are looking for a period of consolidation where the stock is able to hold most of its gains. This could allow for a further bullish run in the future.

Bearish traders are looking to see the stock cool off and start to fall back lower toward the wedge pattern. Bears are looking to see the price fall below both moving averages for sentiment to change and for the RSI to lose ground and fall back toward the middle line.

Photo: Courtesy of Canoo

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