Lucid Stock (LCID) Price Surges +10%, Handily Beating the Broader Market

 Key takeaways

• Lucid (NASDAQ:LCID) stock has struggled in recent months during a -41% downtrend, but it now may have found a bottom as it seeks to break-out from a falling wedge pattern
• Wall Street expects an improved earnings report for Lucid in Q3, compared to the loss per share of -$0.44 reported in Q2
• The CoinCodex price prediction algorithm is expecting a +35% gain for LCID in the next month, in confluence with Silver_FX’s set-up on TradingView

LCID stock may be preparing for long-term trend reversal after outperforming S&P500 in recent days

The price of Lucid (NASDAQ:LCID) has risen 10% today, beating wider market movements now for two consecutive days. LCID rose from a recent low at the $4.88 price level and jumped up to $5.48 before retracing in recent hours, beating out the S&P500 which rose +2% in the same timeframe.

A trader that goes by the username Silver_FX on TradingView has shared his trading set-up for LCID in relation to the recent movements. The trader highlighted that LCID has been in a consistent downtrend since forming a peak at $8.35 in July. The 3-month long downtrend has formed a declining wedge on the 4-hour timeframe, which can be seen as a bullish reversal pattern.

The recent move up to $5.44 has taken LCID to the upper resistance line for the declining wedge. Silver_FX believes that any successful break-out from this price level could kickstart an impulsive wave that takes LCID back above the high formed in July.

LCID trading set-up, via Silver_FX on TradingView

Sentiment around Lucid has been improving in recent times, with Wall Street forecasting an improvement to their next earnings report. Previously, Lucid had reported a loss per share of -$0.44 in Q2 — Wall Street now expects Lucid to report an improved loss per share of -$0.31 in Q3.

However, as recently reported by Bloomberg, Lucid is currently facing a $338,000 loss per unit for each of its electric vehicles (EVs). While the LCID stock price may be close to forming a bottom, the company continues to struggle against high production costs in an EV market that’s dominated by more established brands.

Algorithm predicts 35% gain for LCID in the near term

In confluence with the trading set-up shared by Silver_FX on TradingView, the CoinCodex price prediction algorithm is forecasting a trend reversal for LCID. The 1-month price prediction targets $7.14, which would be a +35% gain from the current price level.

Previously, LCID had lost -41% of its value during a 3-month-long downtrend. The final drop towards $4.88, however, may now have formed the bottom of the movement. If LCID is able to break-out of the key resistance level marked by Silver_FX on the chart, then it seems likely to target $8 and above in the near term.

On a longer timeframe, LCID may also target a fair value zone that was formed back in January 2023. LCID stock momentarily surged towards $17.69 in January before rapidly retracing. The move formed a large wick which could get filled during sustained bullish price action over the coming months.

1-month price prediction for LCID, via CoinCodex

Bottom line: LCID struggles with high production costs of luxury EVs but Wall Street predicts an improvement to earnings

The loss per share of -$0.44 reported by Lucid in Q2 was partly driven by the company’s need to slash prices in order to compete with Tesla (NASDAQ:TSLA). As a newer EV brand, Lucid has also had to carve out a share of a market that is crowded with more established brands, including both Ford (NYSE:F) and General Motors (NYSE:GM).

High production costs do little to ease the process of attracting demand in this challenging market, yet Wall Street expects Lucid to report improved earnings in Q3 2023. With the LCID stock price now looking ready for a trend reversal, Silver_FX has remarked that “an investment here could be great for a long term hold.”

LCID stock price YTD, via CoinCodex