Churchill Capital Corp IV  

CCIV (NYSE: CCIV) was incorporated in 2020 and is based in New York, USA. The company is formed under the umbrella of SPAC (Special-purpose acquisition company) to effect a merger, asset acquisitions, stock purchase, reorganization with one or more than one business combination. These are backed by very well-known billionaire investors, hedge funds, etc, with the sole purpose to raise funds and acquire another company within a deadline of two years.  

Fundamental Update: CCIV, showed a spectacular boom in its stock prices early this year, with a record rise of more than 450% in anticipation of the merger announcement. However, post the official announcement of merger with an upcoming electric vehicle company: Lucid Motors, the stock was sold off, losing most of the early gains. The merged entity is expected to start trading under the ticker LCID from 23 July 2021 onwards, and the merger is looked upon to give competition to Tesla (NASDAQ: TSLA), and the stocks future course of action depends upon the performance of Lucid as per its set targets. In addition, the renowned names as Millennium Management LLC, Jane Street Group, LLC, and more than 200 other Institutional investors, acquired the stakes in the CCIV.

The key takeaway from the announcement of Lucid Motors’ CEO, is to ramp up its production to 500,000 vehicles per year by the end of 2030, which may bring the company in direct competition with Tesla over the next decade.

Technical Analysis:  The stock skyrocketed during the early days of Jan 2021, printed the lifetime high of $64.86, and witnessed a sharp sell-off from there and moving in a range since then. The Relative Strength Index shows the reading of 45.53 and heading towards the south in the chart, increasing the further probability of some more downside in the stock prices. The 21-days Simple Moving Average is coming closer to the stock price and showing the reading of $22.79, lacking the trend determination for the near term. The support level is at close to $16.00, below which the prices can drag down further. For any upside move, the resistance of $28.00 needs to be taken off the charts with solid volumes.

Since the announced merger is going to take place on 23^rd July, which will make the stock volatile and can even pull down the price post-release of the fine prints, it is prudent to wait for the release of the details of the merger and how the share swap deal will take place, including any exit of the well-known names post-merger.  We suggest investors to 'Avoid' the stock at the closing price of $23.79, down -8.18%, as on the close of 14^th July 2021.

Daily Technical Chart – CCIV

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend and vice–versa.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

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