Nikola (NKLA) Gives Up Ground After GM Details Emerge

Nikola Company (NKLA) shares fell sharply during Monday’s session after a memorandum of determining (MOU) with Frequent Motors Company (GM) outlined a a lot smaller settlement than many traders had hoped without any equity stake.

Key Takeaways

  • Nikola shares moved sharply lower during Monday’s session after its GM settlement proved to be a lot smaller than many traders had hoped.
  • The world offer settlement will present GM’s gas cell and battery technologies to Nikola’s semi-trucks but entails no equity and would seemingly be rate-plus.
  • Technical indicators present few hints for the lengthy traipse, but traders might maybe presumably presumably maybe serene retain watch over the 50-day entertaining average and trendline enhance ahead.

The non-binding MOU is a world offer settlement whereby GM will present its Hydrotec gas cell scheme for Nikola’s semi-trucks. The 2 companies will talk about about the correct scope of providers that GM would offer for the integration of the gas cell into the vehicles, moreover to the skill to make Ultium battery techniques in the lengthy traipse. Any likely association is anticipated to be rate-plus the build Nikola pays upfront for the capital funding for ability.

A memorandum of determining (MOU or MoU) is an settlement between two or more parties outlined in a proper file. It’s no longer legally binding but signals the willingness of the parties to cross ahead with a contract.

TradingView.com

From a technical standpoint, Nikola stock broke down from its 200-day entertaining average at $28.98 toward its 50-day entertaining average at $22.80 following the news. The relative energy index (RSI) has moderated to neutral levels with a finding out of 57.73, however the entertaining average convergence divergence (MACD) continues to sort elevated. These indicators counsel that there is highly just a few indecision available in the market at the second.

Traders might maybe presumably presumably maybe serene uncover for enhance at the 50-day entertaining average at $22.80 or trendline enhance at $17.28 over the coming sessions. A rebound might maybe presumably presumably maybe lead on the stock to retest its 200-day entertaining average at $28.98 or trendline resistance at $32.27. If the stock breaks down from trendline enhance, the stock might maybe presumably presumably maybe topple to new lows of $17.28.

The Bottom Line

Nikola shares fell sharply lower during Monday’s session after a disappointing MOU with Frequent Motors to make gas cell and battery technologies for its semi-truck product. After the 200-day entertaining average, traders might maybe presumably presumably maybe serene uncover for enhance advance the 50-day entertaining average or trendline enhance over the coming sessions.

The creator holds no space in the stock(s) talked about excluding by design of passively managed index funds.

Read More

LEAVE A REPLY

Please enter your comment!
Please enter your name here