Sign InMullen Automotive, Inc. (MULN) Shows Bearish Trend Amidst High Volatility; Stock Predictions and Evaluation
Summary
As of August 17, 2023, Mullen Automotive's stock (MULN) experienced a significant decrease in price and exhibited bearish market indicators, but the initiation of a buyback program and resolution of legal challenges may provide some support; however, it is recommended to hold the stock cautiously due to high volatility and a consistent downward pressure.
Technical Analysis
Mullen Automotive, Inc. (Ticker: MULN) closed the last trading session on August 17, 2023, at $0.79, indicating a 19.39% decrease from the previous closing price. The day's range was between $0.78 and $1.01, with a large volume of 81.70 million shares traded. This volume was significantly lower than its average volume of 265.62 million shares, suggesting reduced market participation.
The stock has an outstanding number of shares totalling 643.38 million, with a market capitalization of $508.27 million. It has exhibited significant fluctuations within its periodical highs and lows, reaching a year-high of $21 and plunging to a year-low of $0.10.
Mullen Automotive's Moving Average Convergence Divergence (MACD-3 month) stands at -0.16, which typically indicates a bearish market trend. Additionally, it has an RSI14 of 28, indicative of overselling, potentially providing an opportunity for value investors.
With a 200-Day Moving Average at $3.94 and a 50-Day Moving Average at $0.26, there is substantial divergence, adding further proof of the stock's bearish trend. The Average True Range (ATR) is at 25.51, underlining high levels of volatility.
Fundamental Analysis
The Earnings Per Share (EPS) of Mullen Automotive stands significantly high at $282.57. However, with a P/E of 0, the market is not willing to pay for its earnings. That said, MULN has initiated a $25 million buyback program expiring on December 31. As of August 16, the firm had utilized $3.26 million of its buyback program, repurchasing 3.7 million shares of MULN stock.
In recent news, Mullen's former key shareholder, Ault Alliance, has settled its charges with the Securities and Exchange Commission (SEC), potentially eliminating a negative shadow over the company's reputation.
Stock Predictions
Predicting the stock price for the next trading day on August 18, 2023, the stock's oversold position (RSI14 at 28) may prompt a counter-reaction, causing a short-term bounce. However, the general bearish condition could suppress significant gains.
Looking at the upcoming week, the commenced buyback program might provide supporting pressure, preventing drastic declines. However, the continued bearish market indicators may limit any substantial appreciation.
Evaluation and Recommendation
In light of the above, although the company's attempt at a buyback program indicates positive management sentiment, the prevailing bearish technical indicators and substantial divergence in moving averages suggest a consistent downward pressure. Furthermore, the resolution of legal challenges does improve the business operating environment, the belated investor reaction may not provide immediate benefit.
Therefore, at this point, Mullen Automotive, Inc. (MULN) qualifies as a 'Hold'. Investors should keep a close watch on market sentiment shifts to realize gains when the market corrects from the oversold position. A cautious strategy advised, considering the high level of volatility and longstanding bearish pattern in this turbulent market phase.
