Auto Stock Hits Record Low After Dismal Production Forecast

The company is brushing off better-than-expected fourth-quarter results

Deputy Editor
Mar 11, 2022 at 10:55 AM
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    The shares of Rivian Automotive Inc (NASDAQ:RIVN) are down 7.1% at $38.23 at last glance, after the company slashed its 2022 production forecast in half due to supply chain issues. Rivian reported fourth-quarter earnings report yesterday's close, posting narrower-than-expected losses per share as well as a revenue miss. No fewer than seven analysts have slashed their price targets after the event, with the lowest from Wells Fargo to $40 from $70. 

    Publicly traded since mid-November, RIVN is trading at never-before-seen lows, earlier falling to $37.76. The $70 level has provided a stiff ceiling for the shares since the end of January, while the 40-day moving average has also been guiding the shares lower. On track for its eighth daily loss over the last nine days, the equity is down 63.7% year-to-date. 

    Short interest is down 16.7% during the two most recent reporting periods, and represents 5.3% of the stock's available float. RIVN failed to rebound during this time, however, which could indicate technical weakness in the shares. The stock is overdue for a short-term bounce, as per its 14-day Relative Strength Index (RSI) of 25.4, which sits firmly in "oversold" territory. 

    Options traders are targeting Rivian stock today, with options volume pacing for the top percentile of its annual range. So far, 115,000 puts and 94,000 calls have crossed the tape, or seven times the intraday average. Expiring today, the 3/11 40-strike put is the most popular, with new positions being bought to open there. 


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