Lucid Group Inc Stock Price and Forecast: Will Lucid break $40 after SEC subpoena?

Lucid Group (LCID) falls further on Friday as it closes down over 2%.
Lucid (LCID) stock under pressure as risk-off sentiment dominates.
Lucid (LCID) is also seeing profit-taking ahead of year-end.

Ivan Brian FXStreet

Lucid Motors is Lucid Group but either way the stock remains a favourite of retail traders. Despite this, Lucid has suffered from the general malaise affecting the stock market recently. The emergence of a new covid variant called omicron has seen global equities revert to a risk-off mode and high beta risk names such as Lucid have suffered disproportionally.

What is also clear from the 15-minute chart above is the power of technical analysis in this name. Lucid (LCID) formed a near-perfect double top on Tuesday and Wednesday and that has then led to a near 16% fall for the remainder of the week. Omicron or no omicron, double tops are powerful reversal signals.

Lucid Group (LCID) stock news

Lucid received a subpoena from the SEC in relation to the $24 billion blank check deal according to a report this morning from Reuters. "The investigation appears to concern the business combination between the Company (Churchill Capital Corp. IV) and Atieva Inc and certain projections and statements," Lucid said in a regulatory filing-Reuters. Lucid is cooperating fully with the SEC.

Lucid is up over 170% in the last three months as retail investors have ridden a powerful tide of sentiment and flow into electric vehicle names. Tesla rocketed, then Rivian (RIVN) IPO'd and Lucid moved steadily in tune with them. Tesla has now stalled with Elon selling stock and sits on a key level, $1,000. If that breaks Tesla (TSLA) is set up for further losses. Lucid is also likely to come under yer end selling pressure. News flow is likely to slow into the holiday season. However, we do feel there is one more bounce left in the overall market before the year is out. Risk names will benefit in such a scenario. Lucid was aiming for support below $40 before news of the SEC subpoena hit and now that move lower is likely to accelearte.

Lucid (LCID) stock forecast

Lucid broke out of the daily triangle formation and moved quickly through a light volume vacuum on Thursday. Friday saw Lucid retreat more and find some potential support at the $45 area. this is a previous high volume area from mid-November. If Lucid fails to hold $45 there is another volume vacuum until $37. At that point, it would be time to reassess with a potential buy the dip but clarity would be needed over the SEC issue. If risk assets start to get bulled up again Lucid should also follow. Look to the likes of Bitcoin and other retail stocks for clues. It is better to be slighly late to the move in our view as we look for confirmation.

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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