Trading Strategies For Lucid Stock Heading Into Q3 Earnings

Lucid Group, Inc LCID is set to print its third-quarter earnings after the markets close Tuesday. The stock was trading slightly lower heading into the event but on lower-than-average volume, suggesting traders are sitting on the sidelines.

When Lucid printed a big second-quarter earnings miss on Aug. 7, the stock surged over 10% the following day before continuing in its downtrend, which brought Lucid to an all-time low of $3.96 on Nov. 1

For that quarter, Lucid reported a loss of 40 cents per share on revenue of $150.9 million. The company missed a Street estimate of a loss of 35 cents per share on revenue of $201.9 million.

For the third quarter, analysts, on average, estimate Lucid will print a loss of 35 cents per share on revenues of $192.72 million.

Lucid’s delivery numbers for the third quarter came in shy of analyst expectations, which is likely to weigh on the company’s top and bottom lines. The EV manufacturer delivered 1,457 vehicles, which came in well under the 2,118 vehicles the Street estimated the company would roll out. Read More Here...

From a technical analysis perspective, Lucid stock looks neutral heading into the event, recently negating a downtrend within a falling channel 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 trading in a falling channel pattern on Aug. 1 and has been making a fairly consistent series of lower highs and lower lows within the formation. Between Oct. 26 and Nov. 1, the stock created a quintuple bottom pattern near the $4 mark. On Thursday and Friday, Lucid reacted to that area and shot up almost 20%, negating the downtrend.

• Although Lucid has negated its downtrend, the stock hasn’t yet confirmed a new uptrend with the formation of a higher low. If Lucid receives a bullish reaction to its earnings print and breaks up through the upper descending trend line of the channel, Tuesday’s low-of-day will serve as the higher low and a longer-term uptrend could be on the horizon.
• If Lucid suffers a bearish reaction to the event and falls through the bottom of the channel, the stock will reach a new all-time low, which could accelerate downside pressure. If that occurs, the recent surge in the stock’s price will serve as a bull trap.
• Lucid has resistance above at $5.46 and at $6.17 and support below at $4.04 and at the psychologically important $3.50 mark.

Photo courtesy of Lucid.