What's Next For Nikola Stock After Exiting Wedge Pattern?

Nikola Corp. NKLA shares were trading higher Friday after the stock was one of the most talked-about stocks on Reddit’s WallStreetBets forum.

The stock could be a potential short squeeze candidate, as it has a 26% short float

Nikola was up 1.54% at $12.22 at last check.

Nikola Daily Chart Analysis

• The stock broke out of what technical traders call a falling wedge pattern and has moved higher since then. 
• The stock trades below both the 50-day moving average (green), and the 200-day moving average (blue), indicating sentiment in the stock has been bearish.
• Each of these moving averages may hold as an area of resistance.
• The price has been curling since the break of the pattern. With some buying pressure the stock could see a push up.
• The Relative Strength Index (RSI) has been falling for the last couple of weeks and now sits at the 35 level. This means that there has been more sellers moving into the stock than buyers.

What’s Next For Nikola?

Bullish traders are looking to see a move upward after the break. Bulls want to see the stock cross above the moving averages for a potential change in trend and sentiment. 

Bearish traders would like to see the stock fall and trade below where the stock traded while in the pennant pattern. Bears want to see the RSI dip further and fall into the oversold range.

Photo: courtesy of Nikola.