Rivian Automotive, Inc (NASDAQ:RIVN) was surging almost 10% higher Tuesday after consumer price index data came in lower-than-expected, which increased investor hopes that the Federal Reserve will apply a pause on hiking interest rates when it makes its decision Wednesday.
The move higher also comes ahead of the EV maker’s scheduled same-day sales event on Saturday, where customers can shop for an R1T at Rivian’s service center in Normal, Illinois.
Rivian’s boost higher caused the stock to negate a downtrend, which it’s been trading in since May 30. For a new uptrend to confirm, Rivian will eventually need to retrace to print a higher low, which could provide a promising opportunity for bullish traders looking for a point of entry.
An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The Rivian Chart: Rivian negated its downtrend by rising above the most recent lower high, which was formed on June 9 at $14.86. The most recent lower low was printed at the $11.68 mark on April 26, and traders will want to see the stock reverse course from above that level for a new uptrend to confirm.
Rivian closed the trading session near its high-of-day, and the stock printed a bullish Marubozu candlestick, which could indicate higher prices will come on Wednesday. The second most likely scenario is that the stock trades sideways to consolidate Tuesday’s move by printing a possible inside bar, which would lean bullish for continuation later in the week.
Bullish traders want to see Rivian break up toward the $16 mark on Wednesday and then possibly consolidate near that level to form a bull flag pattern. Bearish traders want to see big bearish volume come in and knock Rivian down under $13.60, which would indicate the recent move higher was a bull trap and the downtrend will resume.
Rivian has resistance above at $15.80 and $21 and support below at $11.68 and the psychologically important $10 mark.
Read Next: What’s Going On With Rivian Shares
Photo: Shutterstock
