Lucid stock price has crashed in the past few months as challenges in the EV industry remained. LCID was trading a $12.58, down by 65% from its highest point this year. It has been in a freefall since February 2021, a move that has brought its market cap from over $120 billion to $4 billion today. So, will the Lucid share price recover?
Lucid stock price technical analysis
The weekly timeframe chart shows that the LCID stock price has sunk in the past few months. It has tumbled from the year-to-date high of $44.20 in August to the current $12.80, and is now hovering near its lowest level on record.
Lucid stock price has moved below the important support level at $19.45, its lowest level in November last year, March, and June this year. This price was the lower side of the descending triangle pattern, a common bearish sign in technical analysis.
It has moved below the 50-week and 100-week Exponential Moving Averages (EMA), a sign that bears remain in control. A closer look shows that it has moved to the ultimate support of the Murrey Math Lines tool.
The Lucid share price remains below the Supertrend indicator, a sign that it is facing substantial pressure. Therefore, the stock will likely continue falling as sellers target the psychological point at $10. A move below that level will point to more downside, potentially to $8.
On the flip side, a move above the strong, pivot, and reversal point of the Murrey Math Lines at $19.45 will invalidate the bearish outlook.
Top reasons why the LCID stock crash has more room to go
There are a few reasons why the Lucid Group stock price has more room to go. First, the company has been highly dilutive, a move that has seen its outstanding shares rise from 167 million in July 2022 to 324 million today.
This trend will likely accelerate because of its ongoing cash burn. Just recently, the company raised $975 million in convertible senior notes that will be due in December 2031. A convertible bond is not dilutive at first, but it may be in the future if the lender decides to exercise the shares. Indeed, the company’s statement said:
“Lucid may settle conversions in cash, stock, or a combination, giving flexibility to manage potential dilution and cash obligations.”
Second, the company continues to lose millions of dollars a year, a trend that will continue in the foreseeable future, especially after Donald Trump ended the EV credit business, which brought in millions of dollars in high-margin revenue.
The most recent results showed that the company’s net loss stood at over $1.03 billion, up from the $949 million it made in the previous year. Its nine-month loss rose to over $2.6 billion. This loss trend will continue in the coming years.
Data compiled by Yahoo Finance shows that, the company’s annual revenue will be $1.32 billion this year, up by 63% from what it made last year. It will continue growing in 2026, with its revenue coming in at $2.43 billion, up by 84% from this year. However, the company’s loss per share will be $9.21, followed by $6.59 next year.
The other main risk is that the company’s short interest is rising, a sign that investors expect the stock will continue falling in the near term. Its short interest stands at 13.54%, higher than the year-to-date low of 10%.
READ MORE: Lucid stock price forms risky pattern pointing to a steeper crash
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