Arrival Stock Price and Forecast: New WallStreetBets toy ARVL surges 20% in Wednesday premarket

A new day, a shiny new toy for the WallStreetBets retail traders to turn their attention to. Every morning must be like Christmas for this stock-trading forum on Reddit. What new stock are we going to have fun with today? Arrival (ARVL) seems to be the new kid on the block with an initial starter move of 6% on Tuesday just to kick things off for the main course. Clearly things are starting to get interesting now that the premarket percentage change has had to be changed several times for this article.

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We have been here before. Back in December, ARVL stock surged from $10 to $33 in a matter of days and remained elevated until March. The retail frenzy in January 2021 skipped Arrival shares, perhaps because they had been the early leader, even upstaging GameStop. ARVL shares slid back to $12.60 by mid-April and built a solid base. However, it was not until yesterday that things began to get interesting again for the stock.

Arrival is involved in the production of electric vehicles for the commercial sector and manufactures vans and buses. Recently, ARVL announced United Parcel Service (UPS) has given a commitment to purchase up to 10,000 electric vehicles from Arrival plus an option for a further 10,000. The Arrival electric van is due to begin road trials in summer 2021 with an electric bus planned for later in the year. Arrival is also working with Uber Technologies (UBER) to develop an electric vehicle specifically aimed at ride-hailing, according to a report by Reuters in May. There is plenty of news flow for this one.

ARVL shares appear to have been driven higher by a post on WallStreetBets, but Barclays began covering the stock on June 3 with an Overweight rating and a $25 price target. A user on WallStreetBets on Tuesday identified ARVL shares as having a high short interest, but the latest Refinitiv data shows a short interest of only 1.6%. This data goes to the end of May. MarketWatch reports a short interest of just under 7%. Short volume is not the same as short interest, it should be noted, as both are being mentioned on social media. The short volume in ARVL recently can be seen in the below data from Fintel.io. 

ARVL stock forecast

A feature of the retail or WallStreetBets revolution has been the use of options as a way to trade stocks. This is clever, as buying options means you know your maximum loss on every trade. Arrival (ARVL) stock is no different as the latest data from Refinitv shows the massive call versus put open interest differential. 

The ARVL stock chart below shows the nice uptrend in place since mid-April with a classic series of higher lows and highs. The consolidation phase in May was eventually broken out of before being retested over the early stages of June with a retracement. However, the retracement found support from the consolidation region highlighted. This area also serves as the point of control for ARVL shares in 2021 year to date. $18.64 is the price at which the most buying and selling volume has taken place and acts as an equilibrium. This is always likely to give strong support. Tuesday's price moved bounced sharply and now in Wednesday's premarket the shares have exploded out of the upchannel. Volume, as can be seen on the right of the chart, drops off sharply above $20, leading to a potential acceleration of the move currently happening in the premarket. Above the data appears to be inconsistent or missing, so no further analysis can be made. The next consolidation area and resistance comes at the $26-30 region where ARVL stock price stabilized in January and February before dropping to the April lows. 

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