“Buy, Buy, Buy!!??” Today’s Churchill Capital Corp (NYSE:CCIV) investors appear to be banking on it. But are those determined purchase decisions going to have the look of disappointed “mad money” tomorrow? Let’s take a look at what’s happening off and on the price chart of CCIV stock, then offer a risk-adjusted position aligned with those findings.
“Booyah!!” It seems appropriate in an era of overpriced markets, elevated animal spirits and day-trading retail traders challenging Wall Street’s caste system and how the fast money is made. The “appropriate” I’m referring to is the pin action in CCIV stock and the ignition switch behind it.
In Tuesday’s session, shares of Churchill Capital are motoring higher by more than 7.5%. The spark setting off the bid is tonight’s CNBC Mad Money Cramer interview with Lucid Motors CEO Peter Rawlinson. Rawlinson is Tesla’s (NASDAQ:TSLA) former chief engineer on the Model S, whose company is merging with the SPAC. Big stuff, right?
If history repeats itself, the segment could certainly act as a driver for CCIV. Back in the post dot-com apocalypse, Mad Money certainly enjoyed that kind of status when a CEO came on the show and dangled a carrot or two for Cramer. And in some ways as alluded to above, conditions feel ripe for a rekindling of that special brand of “Booyah!” There’s more too.
Tuesday’s featured face-to-face promises to reveal the EV outfit’s progress on its upcoming Dream Edition Air sedan. Following February’s announced delay, additional clarity could act as a bullish catalyst. As well, the conversation is also expected to give some insight into what Lucid’s pending reverse merger with CCIV means for the combined company’s future. That’s not all though.
The interview could prove slightly more important than otherwise as CCIV did stumble recently. Shares lost roughly 70% of their valuation at their recent March low after Churchill made its union with Lucid official. The spoiler alert? The deal also looked less-terrific for investors caught up in SPAC hype that’s gone on to meme status in 2021. Booyah?
CCIV Stock Weekly Price Chart
Source: Charts by TradingView
If you refuse to feel or say “Booyah!” or act out on “Buy, Buy, Buy!!” impulses, you’re not alone. There is another ace up CCIV’s sleeve, however. Lucid Motors is making an “in-car” entertainment announcement during Austin’s SXSW music festival on Wednesday. Could it be Apple (NASDAQ:AAPL)? Personally, even if the surprise was an Apple music collaboration, in my book that still wouldn’t make CCIV a buy either. That’s not to say I wouldn’t consider exposure to CCIV stock, though.
Technically, I like what I’m seeing on CCIV’s weekly price chart. A sharp decline in Churchill over the past month has worked itself out as a correction signaling a bottom is in place as of Tuesday’s session. The latest price action has confirmed an inside candlestick reversal pattern off the 76% Fibonacci level formed over the prior two weeks. With stochastics oversold and flattening, it’s a decent value proposition, in a Mad Money sort of environment, to consider for positioning long.
Guided by the price chart, but also appreciating today’s market is dictated heavily on short-term momentum rather than looking too far down the road, my suggestion for buying CCIV is to use a shorter-term, out-of-the-money bull call spread. One which fits in reasonably well with what’s possible, but also smartly prevents investors from feeling like crash test dummies is the April $35/$45 call vertical for a debit of $1.75 or better. Booyah!
On the date of publication, Chris Tyler does not hold, directly or indirectly, positions in any securities mentioned in this article.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100% the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
