Nikola Corporation NKLA shares are trading lower Wednesday, and the stock is down by more than 33% over the past five days. Here’s a look at what’s going on.
The Details:
Last week, M&M Residual withdrew its nomination of five candidates for election to Nikola’s board of directors and alleged “potentially fraudulent conduct of Nikola’s management and certain directors.”
A previously filed SEC document dated April 10, included a note from Nikola’s Chairman, Steven M. Shindler, highlighting the contentious battle for board seats to stockholders.
“As you may have seen, M&M Residual, LLC, an entity controlled by criminally convicted former Executive Chairman Trevor Milton, has provided notice of its intent to nominate a slate of Directors,” Shindler said.
Nikola is set to report its first-quarter financial results on May 7 and host a conference call to discuss the results at 10:30 a.m. ET the same day. According to estimates from Benzinga Pro, the company is expected to report losses of 10 cents per share and quarterly revenue of $14.235 million.
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Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.
Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Nikola, an investor could make an assessment about a stock’s long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Nikola, the 200-day moving average sits at $1.15, according to Benzinga Pro, which is above the current price of $0.65. For more on charts and trend lines, see a description here.
Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.
NKLA Price Action: According to Benzinga Pro, Nikola shares are down 1.76% at 65 cents at the time of publication Wednesday.
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