Rivian Automotive Stock News and Forecast: RIVN faces first major setback, stock down 17%


  • Rivian Motors stock still awaits its first down day post IPO.
  • RIVN surges as LCID stock pops 24%.
  • Lucid Motors announces more strong preorder data.

 

UPDATE: Rivian stock got rocked at the open on Wednesday, falling more than 17%. The stock is now trading around $141.50. The EV truck maker has doubled in value since its IPO just a week ago and recently touched an all-time high of $179.47.

Rivian (RIVN) stock IPO investors are making off like bandits as the stock has now more than doubled from its IPO price of $78. RIVN shares closed on Monday at $172.01. While Lucid Motors (LCID) went public via SPAC, its PIPE investors are also making similar gains as the PIPE was done at $15. Now the stock is trading at $55.52. The electric vehicle (EV) sector is the place to be with Tesla (TSLA) being dragged along on the coat tails of Lucid on Tuesday.

Legacy automakers are being left in the rearview mirror as traditional valuations go out the window. Lucid Motors is now worth more than Ford (F), while Rivian is worth more than Ford, Volkswagen (VWAGY) and General Motors (GM). Rivian is the third most valuable automaker in the world. It has orders for 55,000 cars and 100,000 vans, which it hopes to fill by 2023 and 2025, respectively. Ford sells 5 million cars a year. VW sells 10 million per year. No wonder GM CEO Mary Barra said GM is undervalued. Either they are all very undervalued, or EV stocks are extremely overvalued. I know where my guess is.

However, at FXStreet we are not blind to the power of momentum. While we would not advise a long-term investment in most EV stocks due to high valuations, we recognize that short-term momentum is powerful and eliminates the concern about valuations as it deals in a much shorter time span. EV stocks are in the perfect space right now. Going green is in vogue, we have just had the COP 26 climate forum, and money is looking for a home. Retail accounts just look for volatility and momentum, and they are currently finding it in the EV sector. 

Rivian (RIVN) stock news

With such a strong move in a stock, you would usually expect some underlying fundamental catalyst but not in this case. It is simply just more and more momentum entering the stock and inflating the bubble a bit more. Now you may think the term "bubble" is insulting, but it is not meant to be. There is no other way to describe such a valuation. However, that should not stop you from trading it if you want to. Momentum means trend following and can be done to great effect if you use strong risk management.

It is likely when we do get the first down day in Rivian stock that another few will follow as momentum begins to slow. For now it looks likely to continue. If anything, the speed of the move is accelerating. With Lucid Motors also on the up and up, keep an eye on the sector for signs of slowing momentum across one or more stocks. That will be the signal to get more defensive.

Rivian (RIVN) stock forecast

We can see clearly using the volume profile that the strong volume-based support is at $130 and again at $100. $100.52 is the point of control – the price with the highest amount of volume. No resistance is in sight.

RIVN 1-day chart

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD extends sideways grind near 1.0850 in quiet trading day

EUR/USD extends sideways grind near 1.0850 in quiet trading day

EUR/USD moves sideways at around 1.0850 in the second half of the day. The data from Germany showed that the IFO Business Climate Index edged lower to 89.3 in May but failed to trigger a market reaction. US markets will remain closed on Monday.

EUR/USD News

GBP/USD climbs to new two-month high above 1.2750

GBP/USD climbs to new two-month high above 1.2750

Following a quiet European session, GBP/USD edged higher and touched its strongest level since mid-March above 1.2750. Financial markets in the US are closed on Monday in observance of the Memorial Day holiday, possibly limiting the pair's volatility in the American session.

GBP/USD News

Gold recovers toward $2,360 following Friday's sharp drop

Gold recovers toward $2,360 following Friday's sharp drop

Following the sharp decline seen in the second half of the previous week, Gold stages a decisive rebound toward $2,360 on Monday. In the absence of high-tier data releases, escalating geopolitical tensions seem to be providing a boost to XAU/USD.

Gold News

Ripple holders wait for SEC lawsuit ruling amidst optimism of XRP ETF in 2025

Ripple holders wait for SEC lawsuit ruling amidst optimism of XRP ETF in 2025

Ripple holders are awaiting a ruling in the Securities and Exchange Commission’s (SEC) lawsuit against the payment remittance firm. A court ruling was awaited in May 2024, however there is no update, as of Monday, May 27. 

Read more

Three fundamentals for the week: Traders laser-focused on Fed's favorite inflation figure Premium

Three fundamentals for the week: Traders laser-focused on Fed's favorite inflation figure

US Consumer Confidence kicks off the week with worries of further deterioration. An update on past US GDP growth may also include a downgrade. Core PCE, the Fed's preferred gauge of inflation, is set to trigger high volatility. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures