Stock of the Day (2/7/21) – FUV (Arcimoto)

What happened to Arcimoto – FUV?

Arcimoto recently formed a cup and handle on the daily chart between November 24, 2020 to January 20, 2021. The share price of FUV had a breakout on 1/21/2021 on high volume, triggering bullish signals.

FUV’s Current Stock Pattern

After the breakout on 1/21/2021 from $18.49 to $23.06 – a 24.7% increase in one day. Some investors took profits and sold the next day. After this, a tight 4 days occurred before the stock climbed further to new highs soaring to $36.80, a 99% increase from the original buy point.

Should I Buy Arcimoto – FUV Stock?

At Stock Tavern, we would be cautious about entering into a new position after such a massive breakout in such a short amount of time. Friday saw momentum pull back down to $31.87 as investors cooled off and ran away with their gains. The breakout was successful and is definitely a good signal for the stock, so it will be worth monitoring whether a new pattern such as a saucer or flat base begins as the stock cools off.

What can I Learn if I Missed This Breakout?

Always be on the lookout for stocks forming a cup and handle, even if it is on the daily charts. The most successful and the highest probability breakouts will always occur on the weekly chart patterns as the longer it takes to form, the greater likelihood of success.

Next time, monitor the cup and handle closely and watch for the dip forming the handle. Some more risky investors like to buy when the handle is forming to get in earlier, but this could result in further losses. It is important to have stop losses set if you choose this risky move. Otherwise, when you notice the volume spike and the share price base the buy point, you want to enter your trade and watch it fly.

As always, Stock Tavern is not suggesting you buy or sell this stock, and this analysis should not be taken as financial advice. Always do your research and make your own decisions, we all have different risk profiles and therefore no trade is right for everyone.

Disclosure: Stock Tavern has no position in FUV

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