- Lucid Group stock loses more ground, falling 7% on Tuesday.
- LCID shares are now down 14% in the last week alone.
- Growth and yields are the main factors at play here.
Lucid Group (LCID) is still suffering as the repricing of risk continues in the wake of the yields surge. Worrying signs continue overseas with the yield on 10-year German bunds going into positive territory for the first time since May 2019 and US yields are again tracking higher this morning.
Growth stock and yields are not happy bedfellows and have a fractious relationship. Growth requires cheap credit and easy money, two things markets have had plentiful supply of since the pandemic began and even since the Global Financial Crisis. That era may be coming to an end with skyrocketing inflation though. Things look even worse as the latest retail sales and consumer sentiment figures from the US bring up the dreaded specter of stagflation.
Lucid Group Stock News
Today may see some consolidation of recent losses as European markets and US futures show signs of stopping the recent rot, but this may be short-lived. Investors are repricing risk in the wake of higher yields, and growth stocks are first up in the firing line. If you cannot generate yield or cash flow in an inflationary, higher yield environment, then you will have a smaller allocation of investor portfolios going forward. Lucid has little in the way of fresh news, and that is also its problem. Momentum or retail-driven stocks need news, even rumour or speculation, to keep them attractive.
More significantly the lockup period for legacy investors ends today. 180 days have passed since the SPAC called Churchill Capital Corp IV merged with Lucid Motors, the original name of the company. The shareholders of the original 1.19 billion shares were not permitted to sell any of those shares for 180 days, which expires today, January 19. The majority of these shares are in the hands of long-term backers so it may not be as significant as the last lock up expiry in September.
Lucid Group Stock Forecast
Currently, a downward formation is playing out well with a lower high already in place. Support at $36 looks perilous although it may survive the week. Once or if $36 goes, the target becomes $28 and lower. We have identified the large volume gap on the chart below $36, and this should ease the path lower and see the speed of the fall accelerate. We remain bearish technically unless $47.59 is broken.
Lucid Group (LCID) chart, daily
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