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With Lucid Motors Buyout Talk, Here's What the Charts Indicate

Trying to trade buyout rumors can be difficult.
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Shares of Lucid Motors (LCID)  soared sharply on Friday on rumors that Saudi Arabia's Public Investment Fund is considering buying a remaining stake in the luxury electric vehicle startup.

Let's check out the charts and indicators.

In this daily bar chart of LCID, below, I can see that prices quietly moved higher in January until Friday's huge rally on very high trading volume. Prices made a very large high/low range but closed in the middle of the range - neither bullish nor bearish.

LCID rallied above the 50-day moving average line and the slower-to-react 200-day moving average line. The slopes of both of these math-driven indicators are still negative.

The On-Balance-Volume (OBV) line has climbed in January but its next move is up in the air. The Moving Average Convergence Divergence (MACD) oscillator is now back above the zero line. 

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In this weekly Japanese candlestick chart of LCID, below, I see a very volatile picture. Prices can rally or decline sharply. In the most recent week the price of LCID soared but left a large upper shadow telling us that traders rejected the highs. Prices are below the declining 40-week moving average line.

The weekly OBV line is weak as is the MACD oscillator. 

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In this daily Point and Figure chart of LCID, below, I can see an upside price target in the $39 area but there is a band of resistance between that price target and current prices. 

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Bottom line strategy: Until very recently the charts of LCID looked bearish. Trying to trade buyout rumors is not something I want to actively get involved with as the decisions will be made far away in some wood-paneled room on a high floor. Way above my pay grade.

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