How To Trade Rivian Automotive Before And After Q2 Earnings

Rivian Automotive, Inc RIVN is set to print its second-quarter financial results after the market closes Thursday. The stock was trading about 3.9% higher heading into the event.

When the American electric vehicle maker printed its first-quarter results on May 11, the stock opened slightly higher the following day and surged 41% over the course of that day and the six trading days that followed.

For the first quarter, Rivian reported an earnings loss of $1.43 per share on revenue of $95 million. The company beat the EPS estimate of a $1.44 loss but missed on estimated revenues of $130.5 million.

For the second quarter, analysts estimate Rivian will print revenues of $337.52 million. Traders and investors will be watching closely to see whether Rivian has increased its deliveries during the quarter.

On July 13, Canaccord Genuity analyst George Gianarikas initiated coverage on Rivian with a Buy rating and announced a $61 price target. The new price target suggests there’s about 657% upside for the stock, in the analyst's view. 

From a technical analysis perspective, Rivian’s stock looks set to trade higher over the coming days because the stock has settled into a strong uptrend pattern on the daily chart. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The Rivian Chart: Rivian has been trading in a strong uptrend since July 5, when the stock reversed course off the $24.48 mark. The most recent higher low within the pattern was printed on Aug. 5 at $35.10 and the most recent confirmed higher high was formed at the $39.29 mark on Aug. 8.

• On Thursday, Rivian printed a higher high above the most recent high and was looking to print a doji candlestick on the daily chart. A doji candlestick can suggest a reversal, which may indicate the stock will trade lower on Friday.
• If Rivian receives a positive reaction to its earnings print, traders can watch for the stock to print another reversal candlestick over the next few days to indicate when the pullback is likely to come. A retracement to the downside is likely to come soon because Rivian’s relative strength index is near overbought territory.
• The eight-day exponential moving average has been guiding Rivian higher since July 6 and is acting as strong support, if Rivian pulls back on Friday, bullish traders will want to see the stock regain the eight-day EMA and close the session above the level for longer-term confidence.
• Rivian has resistance above at $41.04 and $45.23 and support below at $43.28 and $29.32.

Photo courtesy of Rivian.