Lucid
Shares of electric vehicle manufacturer Lucid (LCID) rose by 14.5% on Thursday after the company announced it had assembled nearly 800 vehicles at its Saudi factory that opened in September, according to Reuters. The Saudi factory, based in California, has an initial production capacity of 5,000 vehicles per year, with plans to open a manufacturing facility by 2026. Currently, the company manufactures vehicles destined for the Middle East in Arizona before disassembling, shipping, and reassembling them in Saudi Arabia. The kingdom’s sovereign wealth fund owns a 60% stake in the company, with the Saudi government agreeing to purchase 100,000 vehicles from Lucid over the next decade.
This has been a strange week for Lucid, with its shares dropping on a number of significant events including its exclusion from the Nasdaq 100 index and the departure of its chief financial officer.
LCID shares broke through the main downtrend line earlier in December before re-testing the initial breakout level. Thursday’s price movement saw a resumption of short-term bullish momentum, as the stock closed above the 50-day moving average with the highest single-day trading volume since mid-July. Moving forward, it will be worth monitoring the 200-day moving average, which may act as a resistance line.
Foot Locker
Foot Locker (FL) shares rose by 10% yesterday after the sneaker retailer received an upgrade from investment bank Piper Sandler. The bank’s analysts believe the company will benefit from year-end inventory reductions, leaving plenty of room to launch athletic fashion products for 2024 according to Reuters. They also noted growth in the non-Nike product lines within the footwear chain, indicating that this reduces the company’s exposure to Nike’s direct-selling model, which has seen the shoemaker distance itself from wholesale relationships.
It appears that the FL stock price has formed a reverse head-and-shoulders pattern, a chart formation that is typically interpreted by investors as a market bottom. The stock signaled a bullish trend yesterday by closing above the flag that formed around the 200-day moving average. Key areas on the chart to watch include the upper resistance around $40 and the potential recovery of two prominent gaps that formed over the past month.
QYLD ETF
Although the QYLD ETF did not achieve significant chart movement on Thursday, it is worth monitoring in next Tuesday’s session. The term “Triple Witching” simply refers to the simultaneous expiration of stock index futures, stock index options, and stock options, which occurs four times a year on the third Friday of March, June, September, and December.
This event typically leads to increased trading volumes and volatility, which may suit this fund as it is designed to capitalize on rising market volatility by holding shares of the Nasdaq 100 and selling options on those shares to collect premiums. Furthermore, this Triple Witching coincides with the rebalancing of the Nasdaq 100, which could add further volatility to the upcoming Friday session.
The ETF’s share price has struggled to gain momentum after breaking the upper trendline of a descending channel but remains comfortably above the pattern. Investors should watch for potential spikes related to Triple Witching/rebalancing through the 200-day or 50-day moving averages which may be of short duration and provide attractive entry opportunities.
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