Shares of Fisker (NYSE:FSR) have received some token clemency in recent days. But in the grand scheme of things can FSR stock be resurrected? Let’s take a look at developments off and on the price chart, then offer a risk-adjusted determination aligned with those findings.
Special purpose acquisition companies or the now very familiar shorthand investment known as SPACs have had a time of it in 2021. The fallout has been particularly painful for well-hyped electric vehicle-related SPACs. ChargePoint Holdings (NYSE:CHPT). Churchill Capital (NYSE:CCIV) and Luminar Technologies (NASDAQ:LAZR) are some of this market’s high-profile casualties.
FSR stock is also rightfully a card bearing member.
Amid EV SPAC wrecks victimized by investors pulling the plug due to multiple concerns –semiconductor chip supply chain worries or more damning company-specific fallouts – shares of luxury and eco-driven EV designer Fisker cratered with the best of them the past couple months.
FSR Stock and Pressure
At its weakest two weeks ago, FSR had fallen as much as 67% from its early March high. The selling pressure on Fisker also briefly put the stock back beneath its sponsor price of $10.
A breach of $10 immediately in front of Fisker’s Oct. 30 , 2020, reverse merger provided a heavenly windfall for investors with shares reversing strongly by more than 135% in three weeks. The latest violation doesn’t hold the same importance with the transaction consummated.
But with FSR stock still off 14% year-to-date and shares offering other promising prospects, is it time for shares to enjoy a second coming of sorts?
In defending Fisker, there has been some fairly significant and indiscriminate selling in the EV SPAC market. And bullishly, FSR doesn’t have the stigma of Nikola (NASDAQ:NKLA), Hyliion (NYSE:HYLN) or QuantumScape (NYSE:QS), whose electric vehicle technologies have come under fire over the past year.
A Test of Patience
Also a positive, nobody denies Fisker’s overtly greener, vegan-friendly and competitively priced EVs will hit the road running. In fact, there’s a waiting list of 16,000 customers wanting what Fisker is bringing to the market.
The challenge today is patience. FSR’s first product, the Ocean SUV, isn’t set to be released until late 2022. For those that remain virtuous though, they’ll also be in sublime company.
This past Friday Fisker’s top brass met in private with Pope Francis. The team was presenting an even grander vision for an Ocean SUV intended to offer ethereal papal transport of the highest order. That’s bound to make some believers in FSR stock, right?
Along with the Ocean for the masses, the singular release of the Fisker “Popemobile” will also be unveiled next year.
FSR Stock Weekly Price Chart
Source: Charts by TradingView
Fisker is making calculated production and otherworldly moves to ensure success against future competition from Tesla (NASDAQ:TSLA), Lucid Motors and others when its autos finally find their rubber meeting the road. And today, the FSR stock price chart does look promising.
Technically, weekly volume signs continue to indicate zealous buyers. Shares also confirmed a bullish weekly doji this past week and stochastics are positioned to trend out of oversold territory. It looks good. But rather than hope for divine price action or pray Fisker shares won’t turn evil, I’d suggest moving beyond the price chart for ironclad strategic positioning.
To find that certainty I’d turn to a fully-hedged collar spread in FSR stock. Bottom line, in front of a distant head-to-head with the Model Y or Lucid Air – and for that matter, on the other side that initial clash – a collar’s defined and reduced risk features an ability to adapt in bull and bear markets. This can help investors stay the course more successfully without fear of becoming a crash-test dummy.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.