NKLA bearish (inverted) cup and handle pattern. Nikola to -$9

NKLA bearish (inverted) cup and handle pattern. Look for a close below the the lower trendline drawn across the handle with above average volume (50M). Unfortunately for GM & long share holders, NKLA warrants give the holder a right to buy Nikola for $11.50 a share. Not to mention all the terribly negative news over the past 2 weeks. I'm not going to re-hash it here but unless you've been living under a rock... With a net debt of -$702M & Free Cash Flow $-52M, NKLA is going to $9 per share eventually. Nikola has a 4 month high of $93.99 and a 4 month low of $10.20, that's a whole lot of volatility. If you are long NKLA shares, a word of caution here, pick up a NKLA $20 Put for insurance (9/25 $19.46 close). Because NKLA is so volatile, the only plausible options play I see here is a NKLA $20 straddle or a looser $22-$18 strangle. Happy trading and Good luck people.

تعليق:

I just wanted to edit my idea. A bearish $20 Put / $24 Call strangle would be better allocation of funds 4:1 ratio. But because NKLA is so volatile it's smart to hedge 25%. Especially after watching people drive the price of HTZ up for 2 weeks even though they went bankrupt...

تعليق:

Jakubowitz Law announced that securities fraud class action lawsuits have commenced on behalf of shareholders Nikola Corporation, f/k/a VectoIQ Acquisition Corp. (NASDAQ:NKLA)

The filed complaint alleges that defendants made materially false and/or misleading statements and/or failed to disclose that: (1) VectoIQ did not engage in proper due diligence regarding its merger with Nikola; (2) Nikola overstated its "in-house" design, manufacturing, and testing capabilities; (3) Nikola overstated its hydrogen production capabilities; (4) as a result, Nikola overstated its ability to lower the cost of hydrogen fuel; (5) Nikola founder and Executive Chairman, Trevor Milton, tweeted a misleading "test" video of the Company's Nikola Two truck; (6) the work experience and background of key Nikola employees, including Mr. Milton, had been overstated and obfuscated; (7) Nikola did not have five Tre trucks completed; and (8) as a result, defendants' public statements were materially false and/or misleading at all relevant times.

تعليق:

Nikola’s lock-up expiration is Nov. 30
(Credit: Benzinga.com)

تم فتح الصفقة:

Got some NKLA Put debit spreads.