WKHS - Another W Pattern of Covid-19 and a Mania of all Electric Vehicle.

WKHS, Workhorse is an all electric vehicle company on the Van fleet side.

Some key factors that resulted its uptick.

1. Similar to Tesla enjoying the ride of the all electric vehicle mania. As Tesla had been profiting on its sedan models, this stock came showing with their battery operated Van Fleets for Delivery services like UPS, FEDEX and DHL.  This has been covered by Fool.com's Jul 2, 2020 article called "Why Workhorse Stock is up today?"
2. Similar to those other stocks that had dropped so big during the pandemic locked down, this stock had rebounded in a "W" pattern.
3. May 6, 2020 a huge surprise Fundamental caught the attention of investors. WKHS Net Income made a whopping turn around of $4.8M compared to its negative Net Income of 2019 1st Quarter ($6.3M).
4. A technical breakout from its previous high of $5.35 had just occurred last June 22, 2020    

WKHS as of June 22, 2020

This is the 3rd New 78 Day High Occurrence. This should have been where you placed an entry before the close of the day. 

WKHS with price reaching to a new high of $22.90. 

This is a total explosion in just 6 days. A Supernova effect. The question remains if this stock will be able to continue its fire or it is just a move due to hype. With the fundamental of having a positive turn around on its Positive Net Income of $4.8M compared to the negative result of ($6.3M) in Q1 2019, the stake is high. All those that had been burnt from its losing streak last April 2016 and have persevered are now reaping up their profits. But those who have enjoyed the ride from $5.35 breakout are now cashing in their money. See the drop as of July 6, 2020 (next chart below). A -23% drop.

WKHS July 6, 2020 -23% Drop.

To see clearly of the direction of this stock in the long run, we need to view its monthly chart.

WKHS July 6, 2020 Monthly Chart

The month of June was a real solid month having a surge in price action from $2.45 to a high of $20.00 clearly breaking out with a bullish engulfing candle the previous highs of $10.00-$12.00. We could probably base our next Target on this stock using the monthly chart.

Based on our Calculation.

TP = Target Price

PH = Previous High

VL = Volatility Low (usually the support)

BC = Breakout Close (This is when it made a huge breakout with an bullish engulfing candle 

TP = ((PH - VL)*3) + BC

TP = ((10-0.82)* 3) + 17.39

TP = 44.93 OR 45.00

So our probable target is around $45.00 for this stock. All we have to do is find those days where ti will have its pullbacks and position ourselves there. The nice things with this move is that as you can see the volume is really very significant. It had surge to 1,704.80% from its normal monthly trading volume. There could be a probability that it will retest its previous highs of $12.00 down to $10.00.

Finviz had identified the following for this stock

EPS Q/Q = 150.10%

Sales Q/Q = -75.00%

The Earnings per share has already advanced due to growing interest. The Sales would probably follow when FEDEX, UPS and DHL would place orders on the electric Vans. For now it is still speculation. But look at TESLA when it started with its EV Cars, now it is enjoying a huge gain from $17.54 to $1,377.79 for a period of 10 years.

 

TSLA June 22, 2020 Monthly Chart

 

1. From Debut to New breakout to $100.00 it took TSLA to do it for 2 years and 10 months.
2. Then from that timeline it took 5 years and 7 months to breakout to $400.00.
3. From $400.00 it took only 8 months to reach $1,377.79/share 
4. The retest to $400.00 came after 3 months after breakout. This is what we are going to look for WKHS. a retest to its previous high. The retest on WKHS could probably be between $10.00 to $12.00. See the yellow rectangular box on monthly chart of WKHS.