The Rivian share price closed 2.32% lower on Thursday and is toying dangerously with the lower border of the ascending channel on the daily chart. This support is what is keeping the stock above the $30 mark.
Stocks of EV companies such as Rivian Automotive are having a hard time due to the headwinds that have been building up. China has effected new COVID-19 lockdowns, which could snarl up the EV supply chain that has suffered a lot in the last year. Rising interest rates will make it more expensive for people to finance new cars, and the inflationary risks that remain in many countries will change consumer spending habits. No one will think of buying an electric vehicle if they barely keep up with grocery and electricity bills.
The Rivian share price is also facing company-specific pressure. The company’s 2nd quarter update showed that while its vehicle estimate for 2022 still remains on course, it has racked up $1.7billion in losses. The company is now projecting a rise in its full-year loss for its 2022 fiscal year.
The situation typifies why the outlook for many EV companies for 2022 is on the bleak side of the street. Rising interest rates and the inflationary environment will persist into 2023. This has dampened the sentiment of investors who may decide to deploy their capital elsewhere until market conditions improve.
The daily candle’s attempt to break down the channel was rejected via a bounce by the bulls in Thursday’s trading. This border needs to go if the bears are to attain the 28.78 support (6 May and 9 June lows). This pivot
stands between the bears and the 24.87 support level, formed by the 16 May low and 4/5 July bullish engulfing pattern. An additional harvest point lies at the 20.22 price mark, which is the 100% Fibonacci extension of the price swing from 28 February, 15 March and the 30 March peak. Below this level, new record lows would develop, with 10.49 (127.2% Fibonacci extension) being a likely candidate.
On the flip side, a bounce on the channel’s trend line keeps the price action within the channel and on course to make contact with 35.10 (25 April and 22 July highs). If this barrier is degraded by bullish pressure, 40.16 becomes the next target in line. This 12 August peak stands between the bulls and the rendezvous point of the channel’ return line with the 44.96 barrier (8 March high). If the bulls uncap this price level, a new harvest point emerges at 53.34 (27 January and 2 March highs in role reversal).
This post was last modified on Sep 02, 2022, 16:42 BST 16:42