Workhorse - finished accumulation, is the stock headed to 30$ ?Workhorse is one of our favorite EV stocks, one of the reasons for that is because it's been around for a while (started in 2007) and they are not just dealing with EV and EV batteries but also with Drone technology. Drone technology is expected to grow its use widely in the USA and following the announcement of the FAA that drones need to remotely identify themselves while in flight 2 weeks ago, made us the investors understand drones are getting into the mainstream technology space. It's worth mentioning here that Boeing (BA) got several contracts from the US Army to build advanced drones with minimum human supervision and a high level of AI and automation that will make drones the perfect tool for espionage and other covert missions. One last thing to mention on WKHS is their big contracts for delivery trucks with united states post office service (USPS) which we were a bit hesitant about till a few weeks ago when they announced it is going as planned.
Let’s talk about the important part – Technical:
So, this is pretty easy to understand – WKHS has been trading sideways from the beginning of December from 20$ to 23$. The stock broke resistance level on Jan 5th and the 23$ line is now our new support level, although it needs to be tested again. After the rally stock went down back to the 23$ line and now we are facing two possibilities :
1. Stock breaks through 27$ line and starts accumulating there and then touch 30$
2. Stock drops to the 20$ line and from there we will see a sideways trend for several weeks to months.
If we see the second option happening this will be a great time to do more ‘dollar cost averaging’ and buy the stock at a low price. We do not have a doubt that WKHS is crossing the 50$ line before the end of 2021 – I believe way before…
One main thing we need to watch is the volume of the stock:
avg volume last 3 months is: 14.7M
avg volume last 1 month is: 17.5M
avg volume last week is: 9M
We can see a decrease in volume meaning a lower sentiment (“Buzz”) around the stock. But I will use a quote here directly from InsiderMonkey: “WKHS has seen an increase in hedge fund interest lately. Workhorse Group, Inc. (NASDAQ: WKHS) was in 13 hedge funds’ portfolios at the end of the third quarter of 2020. The all-time high for this statistic is 10. This means the bullish number of hedge fund positions in this stock currently sits at its all-time high.” This is big news for the stock and it means we are looking at an accumulation stage before a mark-up phase which will cause the stock to rally up again!!!
We are long on the stock and we will keep buying more in our portfolio.
Trade safe and be safe!!
FDGT Academy.
