Rivian Automotive Inc (RIVN) Stock News and Forecast: Is Rivian likely to fall to $78?

Rivian (RIVN) stock falls over 10% on Friday to add to recent losses.
Monday is unlikely to bring any respite for Rivian shares as indices look lower.
Rivian (RIVN) IPO'd at $78 and that is the next support and likely target.

Ivan Brian FXStreet

Rivian (RIVN) shares have been suffering for the past week or more now and broke the psychological $100 barrier on Friday. While Rivian had broken $100 previously that was early in the process, the first two days after IPO to be exact. Since then Rivian has only ever had an intraday move lower than $100 but Friday was the first time the stock managed to close below it since just after the IPO. Rivian closed at $97.70 for a loss of 10.26%. Any respite in-store on Monday? We doubt it. The Manchin missile has done for stocks.

Rivian (RIVN) stock news

Rivian really charged up the bears when it released results on Thursday after the close. Those results were never lined up to be positive and so it proved. The company posted a net loss from operations of $776 million and a net loss of $1.23 billion. Perhaps the most focus was on Rivian's statement that it expected to be a few hundred vehicles short of 2021 production targets. Wall Street analysts had remained relatively upbeat after the results. However, it may be a case of buy the rumour, sell the fact. Many investors, especially retail ones late to the party may not have realized just how big a loss Rivian would post. This is an early-stage investment and the road to profitability is long. The optics of missing delivery targets already will not have sat well.

The picture is likely to deteriorate further on Monday with stocks getting hit on the Manchin effect. Senator Joe Manchin said on Sunday that he cannot support President Biden's Build Back Better plan. His vote is key to getting the plan through a deadlocked Congress. The plan is broad-based but notably has green incentives and especially electric vehicle incentives. Stocks will take this news negatively especially those sectors which had the most stimulus to gain. Electric vehicle manufacturers will take a disproportionate heavy hit from the plan failing to get through.

Rivian (RIVN) stock forecast

Breaking $100 is psychological but also flow-driven. There are likely to be stops triggered below $100 and expect a sharply lower opening on Monday. That should bring the stock close to $90. From there it will be time to reassess for intraday traders. Watch for signs of risk from other risk assets such as crypto, meme tasks, and Tesla (TSLA). The VIX will also give some good clues as to when it is time to get back in. Longer-term we feel this one will have an obvious draw now to $78. The Santa rally has been mashed by Manchin and profit-taking is likely to dominate year-end. Profits are there to be taken in Rivian (RIVN) so expect more losses.

Rivian chart, hourly

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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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