Lucid Motors stock price could face pressure from Air Edition recall

Lucid Motors’ stock price could face renewed pressure when U.S. stock markets open for Wednesday’s trading session. Indeed, the electric vehicle manufacturer issued a recall of more than 200 of its high-end sedans for a possible safety problem, in a press release published on Tuesday.

The Nasdaq-listed company said the front strut damper, a key part of the suspension system on its Air Dream luxury sedans, was not properly assembled by suppliers and could cause safety issues. The company says it has not received any reports of security breaches caused by the faulty suspension component. However, the company has seen fit to issue a precautionary recall.

Latest Stock News from Lucid Motors

Lucid Motors’ Air Dream Edition sedan is the only electric vehicle model the company currently has in its stable. Its launch in 2021 was preceded by delays caused by a merger agreement. Priced at $169,000, it’s a luxury electric vehicle and its rollout is to be followed by three more versions in 2022. The exact number of Air Dream Edition sedans delivered by the company is currently unknown. However, the company expects only 1% of recalled vehicles to have the defective suspension component.

Lucid Motors stock price gave up its first gains on Tuesday after the statement and closed down 4.06%. That extended the stock’s losing streak to three days, after the stock fell 3.07% on Thursday and 5.41% on Friday. The markets were closed on Monday for a public holiday.

Lucid Motors Stock Price Outlook

The price picture on the daily chart reveals an emerging descending triangle formation, which could have bearish implications for Lucid Motors stock price in the days ahead. The price is currently testing the support level of 25.42. A break of this support opens the door for a push towards 22.21, with 19.01 serving as the next target in line, which could complete the triangle’s measured move.

On the other hand, a rebound from 25.42 allows the price to retest the resistance at 28.12. If the bulls can breach this barrier, it also removes the upper boundary of the triangle and invalidates the pattern. This scenario would leave 30.03 as the next upside target, with 33.93 and 36.13 serving as additional targets to the north.

Lucid Motors: Daily Chart

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Eleanor C. William