Trading Strategies For Lucid Stock Before And After Q1 Earnings

Lucid Group, Inc LCID is set to print its first-quarter earnings after the markets close Monday. The stock was trading slightly lower heading into the event in continued consolidation, having given back all its gains from the buyout rumor that caused the stock to skyrocket nearly 100% on Jan. 27.

When Lucid printed its fourth-quarter earnings on Feb. 22, the stock plunged over 10% the following day and subsequently continued in its downtrend, which brought the stock to the $6.64 level on April 25.

For that quarter, Lucid reported earnings of 28 cents per share on revenue of $257 million. The revenue total missed a Street estimate of $302.6 million but beat the estimated loss of 40 cents per share.

For the first quarter, analysts, on average, estimate Lucid will print a loss of 41 cents per share on revenues of $209.88 million.

Lucid’s production numbers for the first quarter came in shy of analyst expectations, which are likely to weigh on the company’s top and bottom lines. The EV manufacturer produced 2,314 vehicles and rolled out just 1,406. The number came in well under the 3,493 vehicles Lucid produced in the fourth quarter.

From a technical analysis perspective, Lucid stock looks neutral heading into the event, having settled into a triangle 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 Lucid Chart: Lucid started to trade under a descending trend line on April 12, and on April 25 the stock began to creep upwards above an ascending trend line, which caused Lucid to form a triangle pattern.

The stock is set to meet the apex of the triangle on May 12 but is likely to break up from the formation following its earnings print, which will determine future direction.

• Within the triangle, Lucid is making a series of lower highs and higher lows. On Monday, the stock attempted to break both bullishly and bearishly from the pattern and failed. The lower wick on Lucid’s daily candlestick indicates there are dip buyers under the $7.40 mark, which leans slightly bullish.
• Bullish traders want to see Lucid break up from the triangle, which will cause the stock to regain the 50-day simple moving average as support. If that occurs, Lucid will also confirm a new uptrend is in the cards.
• Bearish traders want to see the stock break down from the pattern, which will cause Lucid to lose support at the eight-day and 21-day exponential moving averages, which could indicate a longer-term downtrend is on the horizon.
• Lucid hs resistance above at $8.35 and $99.84 and support below at $7.33 and $6.17.

Photo courtesy of Lucid.