Lucid Group Needs Recharge After Long Descent: What's Next For The EV Stock?

The exodus out of overvalued companies, especially those in the electric vehicle sector, continues in Tuesday’s session.

Leading the charge on the downside is Lucid Group Inc LCID, which is the PreMarket Prep Stock of the Day.

Insanity In 2021: From its year-end closing price of $10.01 in 2020, Lucid made its all-time high in February 2021 at $64.86. Over the next seven months, it swooned to $16.12 and staged another rebound.

Investors were not going to get fooled again, and in November it peaked ahead of its all-time high at $57.75 and went into retreat mode. The issue faltered to end the year at $38.05 and the sell-off was just getting started,

Lucid's Rough Stretch: Lucid has only traded higher in four months this year, with all of those gains being $2.16 or less. On the other hand, most of the monthly losses are $3 or much more. The issue must end the year above $10.14 to avoid another monthly loss.

Lucid Hangs Out Too Long At The Lows: Although there are periods of consolidation in any financial instrument, they are a precursor to future moves. For example, before Tuesday’s price action, Lucid had been in a trading range over the last 10 sessions from $9.40 to $10.36.

On Monday, Lucid posted its all-time lowest closing price just above the lower end of the range at $9.43.

Nothing But Sellers: The issue’s slightly higher open on Tuesday turned out to be the exact high for the session at $9.52. It went on to make a new all-time low at $8.54 and is struggling to rebound.

Lucid Moving Forward: In the 17 quarters the company has reported earnings, Lucid has never made any money. The losses have ranged from 3 cents to 49 cents. In its most recent report, it reported an EPS loss of 30 cents.

On the bright side, revenues have increased modestly over the last nine quarters.

While it may be unfair that Lucid has a clear path to zero until the company starts making a lot more cars, and in turn some money, the path of resistance is clearly lower.