CCIV Stock Price and Forecast: CCIV Lucid bounces but all is not well, key support at $17.62

CCIV shares managed to recoup some losses on Friday as a weak employment number saw most stocks rally. CCIV shares have as ever been turbulent and had taken a beating earlier in the week as retail traders continue to desert their screens for the real world.

CCIV shares closed out the week at $19.28, up 1.69%.

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Just a little recap for those of you not familiar with the story. Churchill Capital IV is a Michael Klein-backed SPAC that merged with Lucid Motors to take it public. Michael Klein is a former Citi rainmaker with myriad connections in the financial markets. Lucid Motors is an electric vehicle startup that is due to release its first EV in the second half of 2021. The company is headed by a former Tesla chief engineer, Peter Rawlinson.

CCIV shares fell victim to the retail frenzy in evidence at the start of 2021 and rallied to extraordinarily expensive levels of nearly $65. The frenzy was mainly down to retail traders, who viewed CCIV and Lucid Motors as the next Tesla. Retail traders have grown increasingly frustrated at the lack of access to IPO deals and have turned to SPAC deals as a means of getting involved in a company early, akin to an IPO.

CCIV Lucid stock forecast

CCIV is getting close to the PIPE placement price of $15. Usually, SPAC PIPE transactions are done at $10, the issue price, but because CCIV was trading near $60 at the time of the Lucid Motors merger, the PIPE was done at the higher price of $15. Investors may not want to take a loss on what seemed a free bet and those still left with positions may cut at $15 if CCIV shares trade down there and they are not locked from selling. Investors are also drastically repricing risk in the wake of the shole SPAC bubble earlier in 2021. SPAC issuance has reduced to a trickle during April as increased scrutiny from both regulators and investors means fewer deals.

CCIV has one last major support left at $17.62, after that it is lookout below, with the close from January 11 at $13.20 being the next target. The first major price spike happened on Jan 11 as we can see clearly from the chart below. Closing below $17.62 will likely be a red flag to any investors still long from the PIPE at $15. There are lock-up provisions in the PIPE deal that supposedly go beyond the full merger, but we do not know the exact details and if it is a full or partial lock-up. But even from a psychological view, $15 is a key level. 

The chart is firmly in bearish territory. CCIV has broken major support at the 9 and 21-day moving averages. CCIV has broken the range it had held since early March between $21.25 and $24.96. The Moving Average Convergence Divergence (MACD) is crossing into another bearish formation. The Direction Movement Index (DMI) is already bearish with the negative red line above the green positive line. Relative Strength Index (RSI) is neutral but is moving lower with price, confirming the trend. 

All in all, it is hard to find anything positive here. A break of the 9-day moving average will change things and should bring a test of $21.25 resistance and then the April 27 highs at $24.33. But given the trend, it may be better to initiate a short position using the 9-day moving average as an entry point, with a tight stop above on a break and a possible reversal into a long position in such a case. Those not wanting to be naked short can use put options to achieve the same effect. A $15 put for June 18 expiry is trading around $0.60 per share.

At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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