Mullen Automotive Faces Dire Volatility as Stock Plummets 20.84% Amidst Reverse Split Concerns

Technical Analysis

Mullen Automotive, Inc. (MULN) closed at $0.1322 on September 13, 2024, reflecting a significant decline of 20.84% from the previous trading session. The stock has shown extreme volatility, with a 52-week range stretching from a yearly high of $75 to a low of $0.123, indicating a drastic loss in value over time. The current Relative Strength Index (RSI) suggests the stock is severely oversold at 20, which may indicate potential near-term corrections as traders look for positions in a distressed stock.

The moving averages display a dire trend, with the 50-day moving average at $0.9206 and the 200-day at $5.5325 providing stark contrast to current prices. The MACD reading of -0.162 denies momentum and indicates continued bearish sentiment. Furthermore, the absence of support levels below the current trading price exacerbates the risk profile, rendering it particularly vulnerable to downward movements.

Volume has surged to 115.83 million, well above the average of 32.28 million, suggesting heightened selling activity, possibly linked to the impending reverse stock split set for September 17, 2024.

Fundamental Analysis

From a fundamental perspective, Mullen Automotive exhibits troubling indicators. Its market capitalization stands at approximately $21.38 million, far below the typical threshold expected in the automotive sector, particularly within the growing electric vehicle market. The company's earnings per share (EPS) of $3932.29 seems erroneously inflated given the stock's nominal value, suggesting accounting anomalies or extraordinary items, alongside a price-to-earnings (P/E) ratio of 0, which raises further concerns regarding profitability.

While Bollinger Motors, a subsidiary, has made strides such as securing CARB certification, allowing access to federal and state incentives, these developments may not be sufficient to uplift the primary stock's performance. The future potential tied to new product offerings remains overshadowed by the existing financial instability and the company's poor stock performance.

Intrinsic value calculations based on traditional metrics signify that MULN fundamentally lacks viability given its depressed market capitalization and volatile stock price. Future performance hinges not only on operational improvements but on rectifying the market's diminished confidence, compounded by the imminent reverse split.

Stock Performance Predictions

For the next trading day, September 16, 2024, a continuation of bearish market sentiment appears likely. The reverse stock split might provide nominal interest, but the underlying fundamentals present substantial risk. The stock is expected to hover around $0.12 to $0.14 as it reacts to the split and broader market conditions.

In the upcoming week, MULN may experience continued pressure, projecting values within the $0.10 to $0.15 range unless significant positive news surfaces resolving fundamental issues. Trading volumes should remain elevated, but with a sustained downward trend likely unless served by strong fundamentals or institutional backing.

Overall Evaluation

Categorically, Mullen Automotive is evaluated as a 'Sell' candidate. The combination of extreme volatility, absence of support, underscored by weak fundamentals and an alarming technical outlook, renders its current position untenable for investors seeking stability or growth. The upcoming reverse stock split introduces additional uncertainty; while such measures can sometimes provide a short-term rally, they frequently fail to address core business problems. Investors should approach MULN with caution, considering viable alternatives within the electric vehicle industry or looking for stronger financial metrics and company stability.