Mullen Automotive (MULN) stock pares back some of Thursday's 23% gain
- MULN closed 22.7% higher on Thursday.
- Mullen Automotive secured a distributor for its branded I-GO vehicle in Ireland.
- Lower inflation data has led to furious rally.
Mullen Automotive (MULN) stock has sold off more than 3% in Friday's premarket after Thursday's astounding 22.7% gain. Shares of the early stage EV manufacturer closed up at $0.33 Thursday after an unexpected drop in inflation for October led to the largest rally in two years.
Mullen Automotive stock news
The US Consumer Price Index (CPI) for October came in at 7.7% on Thursday, lower than the expected 7.9% figure. It was also the fourth month in a row that headline inflation dropped. MoM core inflation did rise but at half the level expected. In total it was exactly what markets needed to see. Traders took it as a sign that Fed Chair Powell would be able to end the central bank's interest rate hikes sooner rather than later.
The Nasdaq blasted off, closing a wild 7.4% higher. The S&P 500 also charged ahead 5.5%. It was a day for the history books. The US midterms now being solidly behind, although certain states are still counting votes, also provoked the staggering surge. Much of the market has been made aware that the three months following a midterm election are nearly always quite profitable.
MULN shares were activated by the same animal spirits and took off. It may have helped that Wednesday's news of Mullen's agreement with Ireland's Newgate Motor Group was fresh. The dealership has agreed to buy 500 units initially of the Mullen I-GO delivery vehicle. The model is manufactured by an outside party, but Mullen has the rights of distribution throughout much of Europe. The vehicle has a 16.5kWh battery and has a range of 124 miles. The vehicle costs $12,000 before taxes.
Mullen Automotive stock forecast
With the sell-off in the premarket, the stock will open right at the 9-day moving average. We are not truly in a bullish situation until it also climbs above the 21-day moving average. That average is currently at $0.36. The Moving Average Convergence Divergence (MACD) already shows a bearish crossover, so Mullen Automotive stock requires another surge to convert that into the other direction. Bulls will still see $0.60, the high from October 25, as the near term price target.
MULN daily chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
