Nikola Rallies After Earnings: Can It Recover This Channel?

Nikola Corp. (NASDAQ: NKLA) shares are trading higher Thursday after the company reported its fourth-quarter earnings. The stock reported earnings per share loss of $0.23, beating the analyst consensus estimate calling for a loss of $0.32 per share.

Nikola was up 17.64% at $8.04 Thursday afternoon at publication.

Nikola Daily Chart Analysis

• The stock is seeing a strong green day and is headed back toward a channel it once traded in. Support was previously found near the $9 level but could hold as resistance now as the stock is trading below the level. If able to cross above this level, the stock may find resistance near $20 in the future as this was a strong area of resistance in the past.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment and each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) saw a push higher on Thursday and now sits at 45 on the indicator. This push higher shows that there are almost as many buyers as there are sellers in the market overall. If the stock can continue to see buying pressure in the next few days, there may be more buyers than sellers overall as it sits near the middle line.

What’s Next For Nikola?

Nikola's green day happened in what has been a long-term bearish trend, which can be seen by looking at the highs and lows on the chart. One can see the highs and lows are decreasing, a sign of a bearish trend. The stock has seen bullish movement today and will need to continue to see bullish movement to see a reversal. Bullish traders want the stock to begin to form higher lows and be able to cross above the $9 level. This would put it back into the channel and potentially get the stock ready for more bullish movement. Bearish traders want the $9 level hold as resistance, which may cause a further bearish push in the future.

Photo: Courtesy of Nikola