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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.40% of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
Important Notice - Scam website
Important Notice - Fraud awareness
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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    NKLA Share Price Mania

    The NKLA share price was fast approaching the kind of mania seen in electric vehicle maker Tesla (TSLA) going into the summer of 2020. The NKLA share price rose from under $10 before the COVID-19 pandemic struck in March to over $90 by June. This was off the back of the hydrogen fuelled vehicle maker becoming in vogue with investors. They sought plays which would be tuned into the need for a less polluting environment in the wake of the arrival of the respiratory disease centred virus.

    Learn more about shares trading with ATFX

     

    Clean energy boom for NKLA Shares

    Initially, in 2020 NKLA shares proved to be one of the most high profile proxies to clean energy revival, one which was accompanied by an electric vehicle (EV) and SPAC (special purpose acquisition company) boom. Credibility was further added to NKLA shares by a subsequent deal made with General Motors (GM), with the rally the shares enjoyed briefly causing the market capitalisation to rise to greater than that of Ford (F).

    The fundamental logic was that a maker of zero-emission heavy trucks had caught the zeitgeist, in the sense that in terms of the cost of these environmentally friendly vehicles was pitched correctly for the fleet market.

     

    Nikola share price: the deal with GM

    In terms of the deal with GM, it had obvious attractions, with a nominal value of $2bn for a 11% stake in Nikola. The negative side though was perceived as GM’s intervention being a development deal, one which would provide technological know-how which Nikola would purchase.

    Unfortunately, by early September sentiment towards the Nikola Corporation share price was undermined by a short seller report suggesting that Nikola had misrepresented its technology and the likelihood of developing hydrogen powered trucks.

     

    Nikola’s founder resigns

    The resignation of NKLA’s founder and Chairman Trevor Milton only further hurt sentiment and the NKLA share price later in September. In fact, despite the negative publicity which impacted the NKLA share price, bears of the company may have missed or exaggerated various points.

    For instance, GM stood by its due diligence on Nikola, with its former GM Vice Chairman having been the lead on the SPAC which took NKLA shares public. It is also the case that events at Nikola in terms of the recent newsflow are very much in accordance with companies at the pre-revenue stage.

     

    NKLA Shares Q3 Update

    The latest Q3 update from Nikola has shed light on where the company currently stands. It underlines the way that the commitment to assemble “the first Nikola Tre BEV prototypes” continues. Also key in terms of corporate governance, Steve Girsky was appointed Chairman of the Board in September.

    To allay fiscal doubts Nikola said that it ended the quarter with a strong cash position of $908m, net of $15m in restricted cash. Milestones for Q4 include new collaboration partners and the rollout of hydrogen fueling infrastructure.

    To see all upcoming news and data releases that’ll have an effect on the financial markets, check out our Economic Calendar. It’ll cover all major releases from global economies and give you the exact time the release is due, the previous data, forecast data and actual data (once released).

     

    How to trade shares with ATFX

    Looking to trade Nikola shares and other major company shares? Open a live or demo account with ATFX to get up to speed. Start trading now to benefit from competitive spreads, high-quality trade execution, and no commission.

    1. Register for an account or log in to your existing account

    2. Open MT4 either on your desktop or mobile

    3. Search for Nikola shares in the market watch or symbols window

    4. Choose your position size

    5. Hit buy or sell, and then confirm the trade

     

    Nikola Corporation Share Price Daily Chart

    The key question as far as NKLA shares is whether the retreat from the highs of the year through $90 has run its course? If this is the case then close to $18 we may be looking at a recovery situation. September’s $16 floor remains in focus as this was the low for NKLA shares in the aftermath of the short seller intervention. The assumption to make is that the longer $16 support is held, the greater the chance of an eventual recovery for NKLA shares.

    Daily chart showing Nikola share price daily movements for 2020

     

    Risk management

    Looking to learn more about risk management and how it can benefit your trading? Check out our Risk and reward ratio article for more insight.

    Take the opportunity to develop your risk management strategy. Understand five key risk management techniques to help you look after your funds.

    Last Updated: 11/11/2020

    This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


     

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