Nikola Corporation is overbought but there is room for more upsurge. When to buy?

Nikola Corporation’s (NASDAQ:NKLA) stock is extremely bullish. The stock jumped from a support area of $9.17 on March 24 and has since maintained the gains. At the current trading of $11.14, the stock has added more than 21% in just five days.

The gains happened after the company announced that it started the manufacturing of the much-anticipated electric trucks. The stock jumped more than 16% on the day of the announcement. With Nikola already lagging its peers, such as Tesla in the EV sector, the news was interpreted as a company’s move to deliver on its promise.

Yet again, on March 29, Nikola entered into a financing deal with Mitsubishi’s ENGS Commercial for EV sales. The stock added more than 7% on the same day, continuing with the uptrend.

Nikola aims for $14 but could face a resistance between $11-$12

Source -TradingView

From the technical outlook, the established resistance of NKLA is at $14.65. We are optimistic the stock will rise to this level given the fundamental developments of the company.

Nonetheless, the stock is approaching a minor resistance zone of between $11 and $12, and a potential retreat will occur. The RSI reading of 73 also shows that investors have overbought the stock, and a correction can occur.

Concluding thoughts

Nikola is a strong buy based on the strong fundamentals and bullish sentiment. However, the stock could retreat after touching the minor resistance zone of $11 to $12.

Investors should look to buy on a correction to a lower price. The stock could rise up to a high of $14.65, which we believe would be the appropriate target in the medium term.

The post Nikola Corporation is overbought but there is room for more upsurge. When to buy? appeared first on Invezz.

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