Mullen Automotive (NASDAQ:MULN) has been one of the fastest-moving stocks this June. Shares of MULN stock have continued to gyrate, this time higher today, as investors price in its addition to the Russell 2000 and Russell 3000 indices on June 27.
As InvestorPlace contributor William White points out, these index additions aren’t trivial. The addition of given stock to an index — even indices tracking smaller-cap stocks — tends to lead to more trading volume and investor interest. For Mullen, a growing player in the electric vehicle (EV) space, more eyeballs is a good thing.
That said, since the announcement of Mullen’s inclusion on June 6, sentiment around EV-related stocks has dissipated. MULN stock has sunk from around $1.40 per share following the announcement toward the $1 level. Today’s rally, as well as other rallies over the past week, have allowed investors in Mullen to regain most of this downside however. Shares now trade around $1.30 apiece.
Let’s dive into what investors may want to watch heading into the index inclusions.
Is MULN Stock a Buy Before June 27?
We’re still a little more than a week away from Mullen’s inclusion in the Russell 2000 and Russell 3000 indices. For many traders, this may seem like forever. For longer-term investors who bought MULN on the announcement, it has certainly felt that way.
However, as we approach June 27, Mullen will likely come into focus for more investors. Despite a rather bearish macro environment, MULN stock’s inclusion could drive buying volume. Index funds and other institutional investors tracking these indices will be forced to buy shares. Accordingly, this forced buying pressure is something investors may look to as a wave to catch on the way up.
The extent to which this buying wave has already been factored into MULN stock remains to be seen. From here, it’s likely to remain a bumpy ride, as investors continue to digest catalysts. This year, the stock market has had few positive catalysts to point to. As such, it will be interesting to watch where MULN heads next.
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On the date of publication, Chris MacDonald did not hold (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.