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NIKOLA CORPORATION

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NKLA trade ideas

$NKLA Hindenburged Short SqueezeAfter there was a glimmer of hope that it would escape bankruptcy thanks to the high demand for its new FCEV truck, Nikola Corporation (Nasdaq: NKLA) finds itself in a highly precarious situation once again after Proterra Inc. (NASDAQ: PTRA) declared bankruptcy. As PTRA is the sole battery supplier for the company’s FCEV truck, NKLA may find it hard to fulfill the orders it received for its new truck. Considering the company’s financial struggles, the possibility of bankruptcy is once again high which makes NKLA stock a potentially profitable short play. NKLA Fundamentals With the company pivoting to hydrogen energy, NKLA entered into a long-term strategic partnership with PTRA to supply it with batteries for its Tre BEV and Tre FCEV trucks. The company started producing the Tre FCEV truck on July 31st amid optimism that it would save the company thanks to the high demand it is witnessing. This demand was shown with the company sharing that it received 202 orders for the new truck. However, in an unfortunate turn of events, PTRA filed for chapter 11 on August 7th – only 1 week following the start of production of the FCEV truck. In this way, NKLA may be unable to fulfill the orders for its truck which will severely impact the company’s long-term prospects given its dire need for cash to continue operating. The results of PTRA’s bankruptcy are catastrophic for NKLA and its shareholders since the company would have to resort to dilution to raise capital which may increase the company’s outstanding shares significantly since its shareholders approved the proposal to raise the authorized shares from 800 million to 1.6 billion. Based on this, shorting NKLA stock may prove to be a profitable decision given that its options now are either bankruptcy to restructure its business or mass diluting its stock which will impact the share price negatively. NKLA Financials One of the most alarming figures in NKLA’s financials is its cost of revenue which is $24.9 million according to its Q2 2023. This figure is alarming because during this time the company only realized around $15.3 million in revenue. This discrepancy between revenues and cost of revenues resulted in a gross loss of $27.6 million and a jaw-dropping gross margin of -179%. This imbalance has drastically strained the company’s assets as its total assets decreased from $1.23 billion in Q4 2022 to $1.13 billion in Q2 2022 due to a sharp decrease in restricted cash and cash equivalents from $10 million to $600 thousand. This sharp plummet is likely a result of NKLA’s gross loss and current liabilities of $233.1 million sapping its cash balance. Despite this, the company has done a tremendous job decreasing its current liabilities from $383.5 million in Q 4 2022 due to declines in its accounts payable and accrued expenses, leading total liabilities to drop from $710.1 million to $614.7 million. At the same time, NKLA’s operating costs slightly improved YoY from $142.9 million to $140.9 million. However, the company’s net loss increased substantially YoY from $172.9 million to $217.9 million. Having said that, the company’s net loss would have been much higher if not for NKLA divesting its Iveco stake which provided it with $70 million. Technical Analysis NKLA stock was in a bullish trend as it was trading in an upward channel that it recently broke. Looking at the indicators, the stock is above the 200 MA which is a bullish indication, but below the 50 and 21 MAs which is a bearish indication. Meanwhile, the RSI is neutral at 36 and the MACD is approaching a bullish crossover. As for the fundamentals, NKLA may drop drastically in the near term following PTRA’s bankruptcy since it may not be able to fulfill the orders it received for its new FCEV truck given that PTRA was the sole battery supplier for the truck. In this way, it is very likely the company resorts to mass diluting its shares to raise the capital it needs since it may not generate enough capital from its operations. With the stock trading near its resistance, investors could wait for retests of the resistance and go short with take profits near $1.96, $1.32, and $1, while setting a stop loss near $2.3 if it breaks resistance. NKLA Forecast After PTRA declared bankruptcy, NKLA is in a tricky spot since the company intended to raise funds from the purchase orders it received for its FCEV truck and limit dilution. However, now that the company may not be able to fulfill these orders due to PTRA being the sole battery supplier for the FCEV truck, its chances of surviving its financial struggles appear to be slim to none. In light of this, investors could find it profitable to short NKLA stock given that the company may join PTRA in declaring bankruptcy or mass diluting its shares to raise capital which would negatively impact its share price.
NASDAQ:NKLA
by Penny_Stocks_Today
NKLA Cup and Handle Pullback for Long EntryNKLA on the 2H chart appears in a cup and handle pattern with the full pattern including the bullish continuation now printed. The pattern predicts $ 2.00 of upside . While the fundamentals of a change of CEO may be concerning, the the creativity of finding cash during a slow cash burn without diluting current shareholders. Perhaps he will have two classes of shares as a remedy. There are upsides to "fresh blood". NKLA has been on the rise for two months albeit with some volatility as seen in the price oscillation from the base of the cup. The uptrend is that of a parallel ascending channel. The rise of the amplitude on the AO indicator is reassuring and shows the bullish momentum has the strength of bull legs. I see the pullback in the last trading session as a buy entry. Let's go long! If you are interested in my suggestions of the stop loss and targets or an equivalent options trade, leave a comment. If you found this idea helpful, please like and subscribed.
NASDAQ:NKLALong
by AwesomeAvani
6
Potential Upside on Nikola Corporation Company Fundamentals: Nikola Corporation is an American company specializing in the development of zero-emission vehicles, with a primary focus on electric and hydrogen fuel cell electric semi-trucks. The company has faced a fair amount of controversy in the past regarding the feasibility of its technology. However, it seems to have weathered the storm and is potentially moving toward solidifying its position in the electric vehicle (EV) market. Technical Analysis: Recent Breakout: There's been a surge in price by 37.44% today, which might signify a change in sentiment. This could be driven by a potential fundamental catalyst such as positive news regarding the company's progress, contracts, or partnerships. Resistance Ahead: The stock is nearing a resistance level around $4.61, marked by the horizontal blue line. This is crucial as a break above this level could lead to further upside momentum. Trade Entry: Taking a position around the current price ($3.12) can be considered. Take Profit and Stop Loss: The green area represents a take-profit zone, which aligns with historical resistance. A stop loss could be set below the recent low, around $1.63, to mitigate risks in case the stock fails to break through the resistance. Trade Details: Entry: Around current market price ($3.12) Take Profit: Near $4.61 (Green Zone) Stop Loss: Below $1.63 (Red Zone)
NASDAQ:NKLALong
by aaronkaltman
1
$NKLA Hindenburged Short SqueezeThanks to a new deal introduced on July 13, Nikola Corporation (NASDAQ: NKLA) experienced a short squeeze that helped the stock run nearly 116% last week. That said, the recent short squeeze may be a prelude to a substantial fall or even bankruptcy. In the meantime, NKLA is attempting to gain shareholders’ approval to raise its authorized shares in order to be able to raise capital by issuing new shares. With the company’s annual shareholders meeting set for August 3, shorting NKLA stock at current levels may prove to be a profitable decision as the results of the shareholders’ vote will see the stock fall drastically either due to the expected dilution or declaring bankruptcy. NKLA Fundamentals Financial Woes As is, NKLA is stuck between a rock and a hard place. Currently, the company has a dwindling cash balance that is not enough to pay off its current liabilities as it has a cash ratio less than 1 at .43. Moreover, it has a negative gross margin worth triple its revenues which indicates that the company is losing substantial amounts of cash for each vehicle it sells. At the same time, NKLA has an unsustainable cash burn rate as it burned $179 million in OCF in Q1 2023 and with $121.1 million in cash on hand, the company’s cash balance may not be enough to last the company another quarter. On that note, the company stated in its Q1 earnings that it is operating as a going concern which could see the company have a similar fate to Bed Bath & Beyond (OTC: BBBYQ) which declared bankruptcy a quarter following the introduction of going concern language in its earnings. The Only Escape From Bankruptcy That said, NKLA is looking to gain shareholders’ approval on a provision allowing it to double its authorized shares from 800 million to 1.6 billion to access the required funding it needs to continue its operations. According to the company’s Q1 earnings call, it has access to $243 million available under its share purchase agreement with Tumim and $200 million available on its ongoing ATM offering. However, the company is not able to issue shares to access this capital since its OS is nearly maxed out with 716.9 million shares outstanding out of the authorized 800 million. With that in mind, it appears that NKLA’s shareholders are not that enthusiastic about that provision since the company had to adjourn its annual meeting from June 6 to August 3 to ensure that the provision passes. The reason behind the company’s decision is due to an amendment to the Delaware General Corporation Law that is expected to be effective August 1. Once this amendment is effective the voting threshold to increase the company’s authorized shares would change from the majority of outstanding shares to the majority of shares actually voting on the provision. By doing so, the company’s management appears desperate to pass this provision which shows that NKLA’s outlook would be bleak without raising its AS. In case the provision passes, NKLA stock may plummet significantly due to the expected dilution the stock will witness. As things stand, NKLA stock is already overvalued as its Book Value Per Share (BVPS) is $.79 which is a far cry from the stock’s current PPS of around $2. On that note, if the provision passes, the stock’s BVPS would fall to $.34 – marking a downside of 56.9%. In this way, the stock should follow suit and decline by 56.9% at least considering that it is currently overvalued. Meanwhile, if shareholders do not approve the provision, bankruptcy may be NKLA’s only option to reorganize its business as its burn rate is unsustainable due to its dwindling cash balance. Risks Although taking a short position in NKLA stock may lead to substantial gains, investors should note that the stock is highly shorted with a short interest of 24% and 47.6% of its float on loan which makes it prone to short squeezes as shown by its latest parabolic run last week. For this reason, investors taking a short position in the stock should set a stop loss to hedge against the risk of short squeezes occurring. NKLA Financials One of the most alarming figures in NKLA’s financials is its cost of revenue, which was $44 million in Q1 2023 while realizing around $11 million in revenue. This discrepancy between revenues and cost of revenues resulted in a gross loss of $32.9 million and a jaw dropping gross margin of -296%. This imbalance has drastically strained the company’s assets as its total assets decreased QoQ from $1.23 billion to $1.15 billion, due to a sharp cash balance decrease from $233.4 million to $121.12 million. This sharp plummet is likely a result of NKLA’s gross loss and current liabilities of $276.5 million sapping its cash balance. Despite this, the company has done a tremendous job decreasing its current liabilities QoQ from $383.5 million due to declines in its accounts payable and accrued expenses. In this way, total liabilities dropped $710.1 million to $612.4 million. However, the company’s cash balance remains a fragment of its current liabilities even after accounting for its $10.6 million in restricted cash. In terms of revenue, NKLA experienced a substantial YoY increase from $1.88 million to $11.11 million which is due to the fact that it recorded no product revenue in Q1 2022. When it comes to expenses, NKLA experienced a significant decrease from $151.74 million to $118.13 million and is expected to experience another significant decrease in expenses due to its departure from Europe. It is still worth noting that any expenses accrued will have a negative effect on the company’s already weak balance sheet. When it comes to net loss, NKLA experienced a sharp spike from $152.94 million to $169 million due to the aforementioned reasons. Technical Analysis NKLA Stock is in a neutral trend and has recently entered a sideways channel between $2.09 and $2.8. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which is a bullish sign. Meanwhile, the RSI is approaching overbought at 67 and the MACD is approaching a bullish crossover. As for its fundamentals, NKLA’s upcoming shareholders meeting on August 3 will be a major catalyst since it would either lead to bankruptcy or mass diluting the stock to raise capital. As both are negative outcomes for current shareholders, investors could wait for the stock to break its current support at $2.26 and take short positions ahead of the upcoming shareholders’ meeting. It is also worth noting that NKLA stock is currently overvalued since its BVPS stands at only $.74 which could be a good target for investors shorting the stock. NKLA Forecast Taking into consideration NKLA’s dwindling cash balance, negative gross margin, and its overall financial state, it becomes abundantly clear that NKLA stock’s recent short squeeze is inconsequential. In its current situation, the passing of the provision allowing the company to double its authorized shares appears to be the only scenario where the company will continue existing. However, the company’s survival is associated with mass dilution that would see its share price plummet substantially from current levels. Given that the alternative is filing for bankruptcy, taking a short position in NKLA stock may prove to be a profitable decision, but investors should be wary of potential short squeezes and set stop losses to mitigate any potential losses.
NASDAQ:NKLA
by Penny_Stocks_Today
#NKLA trade plan. Looks reasonableUnusual option activity was identified, resulting in the formation of a HUGE straddle. The resistance level coincides to purchasers' liquidity (see chart), which strengthens the logic of the option combination. We do the best research as we can to find new opportunities in the massive amount of information every day to make data-driven trading decision. Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all!
NASDAQ:NKLA
by ClashChartsTeam
Bullish Potential in NKLA: Fib Retracement Highlights Promising Hello fellow traders, I would like to bring your attention to Nikola Corporation (NKLA) and the intriguing bullish potential it currently exhibits. In this post, I will outline a Fibonacci retracement analysis for NKLA, along with key take profit levels that could be considered for potential trade setups. Fibonacci Retracement Levels: - 0% - $0.54 - 0.382 - $0.98 - 0.5 - $1.12 - 0.618 - $1.26 - 0.786 - $1.45 - 1.0 - $1.70 Take Profit Levels: - 1.272 - $2.01 - 1.618 - $2.41 - 2.0 - $2.86 Recent Market Developments: Yesterday, NKLA demonstrated a notable rebound from the 0.382 retracement level, suggesting the presence of support in that area. Moreover, the stock is currently displaying signs of a breakout above the 0.618 retracement level, which is a positive indication for further upside potential. Analysis and Trading Considerations: 1. With the rebound from the 0.382 retracement level, there is a higher likelihood of a bullish continuation. The move beyond the 0.618 level confirms this sentiment. 2. Traders may consider initiating long positions in NKLA, targeting the take profit levels mentioned above. 3. It is important to closely monitor the price action and market conditions to adjust your trading strategy accordingly. Implementing appropriate risk management measures is always advised. Please note that this post is meant to provide informative insights and should not be considered as financial advice. Always conduct your own analysis and consult with a financial professional before making any trading decisions. Best of luck with your trades, and may the markets be in your favor! Disclaimer: Trading involves risks, and there is no guarantee of profits. The author of this post bears no responsibility for any trading losses incurred by individuals following the information provided herein.
NASDAQ:NKLALong
by maybethatguy
11
NKLA round bottom reversalNKLA has reversed a trend down in the past week as it clear concerns with potentially being delisted with NASDAQ. The symmetry in the trends is shown with an arc overlaid. This brings to mind a cup and handle pattern in progress. It seems likely the NKLA will have a bullish continuation from the good news of stability of its NASDAQ listing. Potential buyers on the sidelines may take positions and generate momentum. I will trade a long trade early in this upcoming shortened trading week. The longer-term anchored VWAP provides support as so just under that will be the stop loss. The first target is 1.70 which was a resistance level a few weeks ago.
NASDAQ:NKLALong
by AwesomeAvani
3
NKLA Long from bottom of channelNKLA has had an interesting week as it sought to have shareholders vote for a dilution to raise the cash necessary to grow its business. The former CEO now convicted and awaiting sentencing as a major shareholder led the opposition and the vote for a dilution failed. Seemingly, NKLA will now seek capital through some other means. Earlier, it was awarded a grant of $24M by California to build out hydrogen station infrastructure along the interstate highways. On the 15-minute chart, the price is currently at the bottom of a slowly rising channel coinciding with the bottom of the Donchian channel indicator and two standard deviations below the mean anchored VWAP. I see this as a good entry point for targeting first the middle of the channel and secondarily the top of the channel. I will find an exact entry on a short time frame likely 1 or 3 minutes and expect to realize a profit of 12-13% potentially intraday. Without regard to the fundamentals of NKLA's financial health, given the extreme volatility, I believe that NKLA can be successfully traded long if the trade is entered when it is oversold and undervalued.
NASDAQ:NKLALong
by AwesomeAvani
1
NKLA Is Nikola puting in a bottom ?NKLA is trying to make an all time low. Fundamentally, the last earnings were okay. Some members of the board are retiring soon. Technically, the relative selling volume is much higher than the moving 50 day average. The zero lag MACD shows no bullish divergence suggesting that that there is no impending reversal. The indicators K/D lines have not crossed indicating the moving average compression / convergence are continuing. Price has fallen outside the Bollinger Bands. NKLA finished out the week with some engulfing bear candles on the news of instability on its governing board. This is unlike the candlestick pattern when NKLA did minor pullbacks on the downtrend foreseen by small body red candles to setup up the minor pullbacks. All in all, as a penny stock, this is probably not shortable but it does have put options for $23.00 per contract for the $1.00 strike DTE 5 with a spread of 5% with high volatility and open interest ( reasonable liquidity) I will take a put option trade of several contracts targeting 50% return and setting a stop loss at 10%. I have always found it helpful to have some naked puts in the portfolio so when the general market of SPY / QQQ reverses t o the downside they can help the put options capture some profit in the synergy.
NASDAQ:NKLAShort
by AwesomeAvani
5