Nikola Stock News and Forecast: NKLA jumps 19% after production announcement

Nikola stock is up 19% to $10.90 in Thursday's premarket.
NKLA shares are down 90% from their all-time high.
The EV automaker plans to produce between 300 and 500 semis this year.

Clay Webster FXStreet

Nikola stock (NKLA) has risen 19% in Thursday's premarket after the once-popular hydrogen fuel cell and EV semi-truck maker reported after the market closed on Wednesday that it had begun production this past Monday. Though it went public via SPAC in mid-2020, until now the company has not made any commercial sales. Nikola shares have lost 90% of their value since their all-time high in June 2020.

Nikola Stock News: 300 to 500 Tre semi-trucks on way

The company has begun production of its Tre model, a battery-electric vehicle semi-truck model. The company plans to produce between 300 and 500 Tre units in 2021 at its Coolidge, Arizona factory.

"We are laser-focused on delivering vehicles and generating revenue as the global leader in zero-emission transportation and energy infrastructure solutions," a Nikola spokesperson said.

The semi-truck maker, also named after inventor Nikola Tesla like Elon Musk's Tesla (TSLA), has not itself been in the news for a while since its founder, Trevor Milton, has hogged all the headlines. The former CEO was charged with financial fraud in July 2021 for allegedly providing investors with false information about the progress his company had made toward delivering a production-ready semi-truck. Famously, Milton put out a promotional video in 2018 that appeared to show a working prototype of its truck driving on its own power. In fact, it later came out that the truck had been pushed down the hill to make it look like it was driving.

Nikola hired Mike Russell as its new CEO at the time of its IPO but has agreed to pay a $125 million fine to the Securities & Exchange Commission due to Milton's actions. Since being indicted, Milton has sold more than 10 million shares of Nikola and now may own a smaller stake than CEO Russell. This major insider selling, as well as a new higher interest rate environment that hurts growth stocks, have converged to send shares hurdling lower for nearly two years now.

NKLA key statistics

Market Cap	$3.8 billion
Price/Earnings	N/A
Price/Sales	N/A
Price/Book	N/A
Enterprise Value	$3.4 billion
Operating Margin	N/A
Profit Margin	N/A
52-week high	$19.52
52-week low	$6.41
Short Interest	26%
Average Wall Street Rating and Price Target	Hold, $12.88

Nikola Stock Forecast: Resistance at $11.50

Nikola's short interest is 26% at the last check. This means that the stock does have a greater ability to fall into a short squeeze, which may be in the cards this week. The announcement has certainly turned heads in retail trader land, regardless of the fact that it will not even produce 1,000 units this year.

The premarket price around $10.75 shows that the market has already propelled NKLA stock above the support-turned-resistance present at $9.75. This level comes from late December and early January when shares traded between there and $11.50. This $11.50 level is the next area to conquer before overcoming the December 27, 2021 swing high at $12.14.

The 9-day moving average has managed to pull past both the 20-day and 50-day moving averages. The stock was actually already moving higher since March 14. Now the 20-day moving average needs to reclaim ground above the 50-day to prove that this rally has legs.

NKLA 1-day chart

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.

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