Trading Strategies For Lucid Stock Before And After Q4 Earnings

Lucid Group, Inc LCID is set to print its fourth-quarter earnings after the markets close on Wednesday. The stock was trading slightly higher heading into the event in continued consolidation after surging 100% on Jan. 27 following a buyout rumor.

When Lucid printed its third-quarter earnings miss on Nov. 8, the stock plunged almost 17% the following day and subsequently continued in its downtrend, which brought the stock to a Jan. 6 low of $6.09.

For the third quarter, Lucid reported revenue of $195.5 million. The revenue total missed a Street estimate of $209.1 million.

For the fourth quarter, analysts, on average, estimate Lucid will report earnings per share of 40 cents on revenues of $302.61 million. Traders and investors will also be paying attention to how many vehicles Lucid produced and delivered during the quarter. The company guided for full year production of 6,000 to 7,000 vehicles.

From a technical analysis perspective, Lucid’s stock looks bearish heading into the event, having settled into a downtrend on the daily chart. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The Lucid Chart: Lucid entered into a downtrend on Jan. 30 and has been printing a consistent series of lower highs and lower lows. Lucid’s most recent lower high was formed on Feb. 16 at $11.27 and the most recent confirmed lower low was printed at the $9.64 mark on Feb. 13.

• On Wedneday, Lucid was forming an inside bar pattern, with all the price action taking place within Tuesday’s range. The pattern leans bearish in this case because Lucid was trading lower before forming the inside bar and because the inside bar was printing near the bottom of Tuesday’s range.
• If Lucid enjoys a bullish reaction to its earnings print and surges above $11.30, Tuesday’s low-of-day will serve as a higher low and an uptrend will be in the cards. If the stock suffers a bearish reaction to the print, the downtrend will remain intact and the stock could fall toward the 50-day simple moving average.
• Lucid has resistance above at $12.20 and $15.30 and support below at $9.84 and $8.35.

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