A Closer Look At The Recent Move In Rivian Stock

Rivian Automotive NASDAQ: RIVN has been on an impressive run lately. Over the last month, shares of the EV automaker are up 36.40%. Just several days ago, the stock was negative YTD. However, after the recent surge higher, shares are now in the positive, up 6.13% YTD. Up close to 20% over the last five days and trading near a substantial level of resistance, is now the time to invest in RIVN, or should investors wait for further confirmation and price stability?

Rivian Automotive is an EV manufacturer focused on pickup trucks and SUVs. The company is among the greenest EV makers, aiming to achieve carbon neutrality well ahead of the Paris Climate Accord timeline. Rivian offers five-passenger pickup trucks and sports utility vehicles under the R1T and R1S labels. The company was founded in 2009 and is based in San Jose, California.

The Recent Move In RIVN

 

The stock traded between $16 and $14 for several months, below a declining 200-day SMA. Over that period, $16 acted as significant resistance. After the company announced impressive delivery figures, and overall positive momentum across the EV sector, the stock broke out of this consolidation and held firmly over $16.

Since gaining momentum above resistance and off the back of the fundamental catalyst, shares of RIVN have surged higher, at one point reaching the 200-day SMA, near $21. Notably, after testing it, the stock failed to hold this area and traded lower towards Monday's close.

Not only does the declining 200-day SMA act as resistance going forward, but this area is also a significant level of resistance from earlier in the year. Throughout January and February, the stock had multiple failed attempts at holding above $21 before beginning its downtrend up until July.

From now on, it will be essential to note whether shares of Rivian can put in a higher low and establish an uptrend above the previous resistance, $16. With a current RSI of 76, indicating that the stock is overbought in the short term, it will be necessary for shares to digest the most recent price action. 

If the stock can base near the previous resistance of $21 and the 200-day SMA, the potential for a second leg higher will significantly increase as the consolidation would indicate that buyers have stepped up.

Rivian Crushed Q2 Delivery Estimates

In the year's first quarter, the EV company produced 9,395 vehicles and delivered 7,946. The company commented that it was off to a slow start for the year as it made changes to its assembly line.

Those early growing pains and changes are now paying off. For the second quarter of the year, Rivian produced 13,992 EVs, an increase of 48% from the previous quarter. The company delivered 12,640 vehicles during the same period. The company commented that those figures remain in line with its expectations and believe it is on track to deliver on the 50,000 annual production guidance previously provided.

Analysts See Upside 

Analysts are bullish on Rivian, with a consensus rating of Moderate Buy, based on 17 analyst ratings. The consensus price target is $28.05, predicting a 42.04% upside in the stock. Month over month, that price target has increased slightly from $27.74. Among the 21 analyst ratings, 11 are Buy, 5 are Hold, and 1 is Sell. The recent change in the consensus price target represents the first time since its IPO that the price target has increased MoM.