NKLA: Chart Reading June 2* this is a pure chart reading (analysis) for NKLA and expected scenarios based on price and volume action and what the indicators tell us - has nothing to do with the fundamentals or how the business itself is doing.
Daily Chart:
- NKLA has accelerated in the past few days with (couple of days showing) large % moves supported by big volume (almost 2x daily avg)
- NKLA has been moving within a steady channel for the past few months
- in this channel, this will be the 6th attempt to break the upper channel line
- indicators showing a move to the bullish side for momentum, sentiment and net volume - but that has already happened in all the prior breakout attempts - doesn't really mean a big deal
Price Projections:
- measured move (based on price structure) target #1 was $16 - which was hit last week.
we see how the action hesitated once that target was hit
- The next measured move goes up to ~ $21.6 -- that's 22% from where we closed today (Wed June 2nd) - that's our scenario #1
- is this target too far: given the recent big moves, and how NKLA accelerated towards the $16, it can take only 2 "big days" to get to that next target
--- *BUT* if we look at the prior breakout attempts, that move may fail - it really depends on how the bulls act at this level, and if more buyers continue to come in more that those who are shorting or cashing out .. so scenario #2 is that NKLA goes back into the channel
the good news in both scenarios, is that some action is happening - it seems many traders got stuck with NKLA and were considering it a "loser"
weekly chart:
- the weekly shows that the "weakness is fading" - rather than "strength is increasing" - so we're not really in bull territory yet -- may get there if the strength continues for couple more weeks
- the weekly chart does a better job in showing the priori breakout attempts
Active positions in NKLA will need to be watched very closely and managed carefully.. this is a very volatile landscape.
good luck!
