Sign InMullen Automotive (MULN) Shows Potential for Recovery Amidst Bearish Trend
Summary
As of July 27, 2023, Mullen Automotive (MULN) is evaluated as a 'Hold' due to a bearish trend and negative sentiment, although an oversold RSI level and recent positive updates suggest a potential recovery in the short-term, while further positive news or indicators should be considered before buying and relative weakness or negative news should be taken into account before selling.
Fundamental Analysis
Mullen Automotive Inc., trading under the ticker MULN on the NASDAQ, is an active player in the lucrative electric vehicle (EV) industry. Over the period, MULN has experienced numerous milestones and downturns, which are critical in evaluating its future performance.
Recent news suggests Mullen Automotive is making strides to grow its operations and increase its footprint in the EV market. The company's majority-owned subsidiary, Bollinger Motors, received a generous $3 million grant to promote job growth in Michigan, adding support to MULN's stock. Also noteworthy is the company's move to enter a pilot program involving its Mullen ONE Class 1 EV cargo vans and Mullen CAMPUS delivery utility vehicles with the Shoshoni Native American Tribe of Northern California and Nevada. This advancement indicates the firm's innovative approach to create an impact in the EV market.
On the downside, over the past 12 months, the stock price has collapsed by more than 99%, reflecting immense investor skepticism about the company's future. Likewise, MULN was negatively portrayed in a published piece as one of "seven consumer stocks I wouldn't touch with a 10-foot pole."
Technical Analysis
Technically, the MULN stock shows a massively bearish trend illustrated by its price staying significantly lower than both its 50-day moving average (0.4084) and 200-day moving average (4.51). The stock closed at a low-price point of 0.1246 on July 27, 2023, recording a 4.81% drop.
Additionally, MULN has an RSI14 value of 21, indicating the stock is likely oversold, a possible sign of an impending reversal. However, the MACD is negative (-0.013929), which aligns with a bearish viewpoint.
From an earnings perspective, the company reported an EPS value of 282.57. However, the PE ratio is 0, which is unusual and can signify a lack of profitability or earnings forecast.
Predictions
Given the company's recent positive news and the oversold RSI level, a bump in the price could be on the horizon. However, the extreme bearish trend and other negative elements, such as a lack of confidence in the consumer sector, might counter this effect. Thus a continued downfall is also plausible.
Evaluation
Considering both the fundamental and technical analysis, it's quite a challenge to sway towards a 'Buy' rating for MULN at the current price. However, due to the oversold RSI status and recent positive updates, it suggests not to opt for more selling in the immediate short-term as there might be a recovery.
Therefore, Mullen Automotive (MULN) is currently evaluated as a 'Hold.' Any decision to buy should be triggered by further positive news or indicators and not solely be based on the current oversold condition. Conversely, any decision to sell should be driven by relative weakness compared to the rest of the market or negative news, which might catalyze a further downfall in price.
