[ad_1]
The stock markets are booming thanks to favorable winds provided by the Federal Reserve and the White House. The government has deployed the heaviest artillery ever to boost the economy after the pandemic. Judging by the strength of the stocks, they may have crossed the line a bit. There are pockets of weakness this week, and as a result some hot titles have lost momentum. Among them are electric vehicle (EV) companies – and therefore, there are EV stocks to buy.
Today’s note on electric vehicles will not include giants like You’re here (NASDAQ:TSLA), Nio (NYSE:NIO) or XPeng (NYSE:XPEV). These three already have good income statements. Therefore, the focus will be on companies with more hope than real fundamentals. The bet is on their future success.
With all of this in mind, investors should consider these speculative transactions. This means that the size of the investment must be appropriate, especially in this environment. I prefer to bet with conviction on the three strong ones, but these certainly make trading exciting. Opportunities are real since the definition of pure potential.
Fed Chairman Jerome Powell yesterday reiterated his commitment to the stimulus. Judging by its tone, they still 100% support stocks. That said, there is no doubt that the bulls are completely in control on Wall Street. In fact, the S&P 500, the NASDAQ and the Dow Jones Industrial Average recently reached new heights.
Where is the rotation opportunity?
Small caps are lagging behind and this is where most EV stocks live. There was a rotating trade between them and the NASDAQ. This latest wave of tech comeback has been a killer. The leaders of the Invesco Trust QQQ (NASDAQ:QQQ) rally this time were the giga-caps. They are just too big! They take away so much capital from rallying that they deprive the small cuts of any momentum. Wednesday’s indexes were breaking records, but the IShares Russell 2000 ETF (NYSEARCA:ETC.) fell by almost 2%.
This diversion will have to be corrected either by another turn of rotation, or by a correction. And since there are no signs of weakness yet, we can assume sentiment will shift back to smaller stocks. Therefore, let’s discuss buying opportunities in three electric vehicle stocks ahead of this move. There is the bearish scenario that there will be no rotation this time around. Stocks might just correct in general.
It is by no means an infallible fund. The whole market is heading towards a situation of diminishing returns. The tailwinds will cease despite Mr. Powell’s assurances. Plus, Wall Street looks months ahead, so it’s not about the date but rather how they anticipate it. The actions will not wait for the announcement of the tap. My bet is that the panic will happen much sooner.
That said, here are the three VE stocks to buy:
- Hyliion (NYSE:SHELF)
- Connect the power (NASDAQ:PLUG)
- Fisker (NYSE:RSF)
Now, let’s dive in and take a closer look at each one.
Electric vehicle shares to buy: Hyliion (HYLN)
HYLN action has good advantages. Those who believe in it adore it. There is no break in their mind and they will continue to stoop to it forever. Hopefully it won’t take too long as it now falls into the bracket.
It’s been hard for almost a year. It fell 5% on Wednesday and is now 80% below its all-time highs. There is light at the end of this tunnel because there is a double bottom that lingers just below. It would be a good opportunity for the bulls to get back to it.
I caution against adding to the current positions because nothing has changed. It is still under fire from salespeople without any major change in its income statement. Technically, the outage started after she lost $ 18 per share. The bulls also lost another important line at $ 15. Therefore, the bulls are on their heels. They had some brilliant moments where they crossed those lines, but failed to hold them back. It is imperative that they get above $ 14 per share to rebuild some momentum.
Basically they have a great opportunity in an upcoming trend. Environmental, social and corporate governance (ESG) is a real endeavor this time around and they can be a precursor. All manufacturers and governments are on the same page with this concept. Meanwhile, Hyliion can also operate the modernization hybrid concept of current semi-trailers. The Hypertruck ERX looks exciting and I can’t wait for them to bring it to market.
It’s up to management to get the rest of Wall Street excited about it. They execute plans, so it’s a matter of showing it in the dashboards. Meanwhile, it is a difficult time for investors who are waiting for this to happen.
Connect the power supply (PLUG)
The shares of companies betting on the future of alternative fuels are running out of steam. PLUG stock is the one that peaked in January. It has since lost 60%, but remains at its lowest. There is some technical hope ahead, but he will likely need more help.
The collective effort is to dislodge the internal combustion engine (ICE). The battle for this supremacy is ongoing and it will last for years. ICE has been dominant for too long for it to be this fast.
The current opportunity is more technical than fundamental. Finances are still in shambles because they are still in start-up mode. Therefore, judging it by the quality of its income stream is unfair.
In turn, the technical application to young stock charts works best in this case. In the short term, it’s a knife that has been falling since July. He might be heading for relief as he’s heading to a place he bounced from last time around.
At $ 24 or less per share, this should be an opportunity to buy PLUG shares. It would be a trade that can also double as a longer term investment. It is important for us to discern the difference between the two. I would not add to the existing position as this is a speculative bet.
VE shares to buy: Fisker (FSR)
Mr. Fisker does it again and this time the FSR title is the way to bet on him. The company offers the Ocean range of electric vehicles to take advantage of the electric opportunity. At this stage, it is the hopes of future success that are the driving forces behind the course of action. The fundamentals are still not there to build momentum.
This is an advantage and a disadvantage. “Hope” is a powerful emotion that is difficult to kill. This will provide support on bad days. Unfortunately, that didn’t work to help him hold $ 16 a share. Once he lost it, FSR stock fell in a downtrend targeting $ 13.50. The technical targets are not always completely met, but the bulls must respect them.
Fortunately, this means that there will be buyers hiding near there. Between $ 12 and $ 15 is a pivotal area starting in April. It was a big battle back then so it will be support now if they need it. The bulls will need the help of the whole market. Any overall weakness in stocks would hurt the trough process.
These comments are more technical and short-term than investors usually realize. But the long-term reasons for buying these three stocks also work. Any of these three stocks are indeed EV stocks to buy for a portfolio looking to enter the segment. Investors looking to lower the average are more confident in their decisions. What looks like a floor in a startup can quickly turn into a giant pothole.
At the date of publication, Nicolas Chahine did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Nicolas Chahine is the Managing Director of SellSpreads.com.
[ad_2]
Source link