What's going on moon gang, i hope you're having an awesome day. My name is matt and in this video i will be discussing one of the handful of stocks that keeps me up at night. Workhorse i'll be going over some of the recent news related to the company i'll be doing a technical breakdown of its stock. Then i'll be sharing my thoughts on if the sell-off from mid-october until now represents a good buying opportunity.

But before i get into that, if you're new to the channel don't forget to join the moon gang by hitting the subscribe button, i'm on the road to 5 000 subscribers and your support with that would be truly appreciated. Also, it would be great if you could drop a like, because it lets me know that you enjoy this type of content, and it also really helps with getting this video in front of other traders and investors who may be interested and now with that. Out of the way, let's get started if you're invested in workhorse you're, most likely well aware that the stock has been selling off since october 12th. Unfortunately, the last trading week of the month has been no different and that's partly because of this workhorse plummets, as lakewood includes the stock and its short ideas at the robinhood investors conference.

Basically, anthony boza of lakewood capital included workhorse in his short ideas at this conference, and this prompted enough people to either sell their position or actually short, the company. I thought this was important to bring to your attention because nothing has fundamentally changed about workhorse. This analyst doesn't believe that workhorse will win the usps contract and when he offered up that dissenting opinion, it prompted a mini cascade in the stock, whether he's right or wrong, it does bring up a fair point. Workhorse investors are increasingly banking on the company becoming a key node in the usps next generation delivery.

Vehicle contract meant to replace the aging fleet of the usps delivery vehicles, while workhorse is in the red. Currently, it is expected to become profitable in the next two years. With consensus, expectations of 4.5 million in profits for 2022., moreover, workhorse currently has a back order of 1100 trucks equating to a potential revenue of 70 million dollars. Of course, given the fact that workhorse remains reliant on winning the usps contract to justify its significant year-to-date stock appreciation, any disappointment on this front leaves its shares vulnerable to a tailspin in the short term.

I believe that this is an accurate statement. I'm viewing the usps contract announcement as a binary event. If workhorse wins it, its stock will explode and if it doesn't there's a good chance, it will decline by a considerable amount in more of a long-term view, though, i'm still very bullish on workhorse, with or without the usps contract. It's an excellently managed company with a high quality product, and it's in a business sector that is becoming wildly popular, i'm not alone.

With my opinions, not everyone agrees with lakewood on the same day that this happened. I also happened to stumble across this article. Workhorse stock will soar 200 when it wins the usps contract. There's a lot of great details in this article, so i would highly recommend checking it out, but to quickly sum it up at the bottom.

We have this workhorse stock is risky. Obviously, we all know that the company has a lot riding on the usps contract. A win could send workhorse stock to the moon, and a loss could send shares catering. The odds are good, that workhorse wins the usps contract and leverages the contract to turn into the tesla of delivery bans in the u.s over the next few years.

If that does happen, workhorse stock has compelling upside potential from current levels. I 100 agree with these statements. Workhorse is definitively a risky speculative play based on its fundamentals. If it doesn't win the usps contract, it will be overvalued, but if it does win the usps contract, it will be seriously undervalued when you're dealing with a company that has so much potential.

It also comes with a high amount of risk, so you have to handle that situation accordingly. Then, to make me even more confident in my bullish opinions the very next day this article was posted on the same website. Investor place, workhorse stock, looks electric ahead of the usps decision once again, there's a lot of great detail in this article, so i recommend checking it out because it is free, but to sum it up, we have this. The postal service remains very interested in the possibility of electrifying its fleet, as in 180 000 vehicles.

An investment in workhorse is all about the future and potential for growth. That is exactly what i've been saying. If you're buying shares of workhorse you're buying the potential for high growth with the key word being potential, the big prize is the usps contract, but even if workhorse loses out or lands just part of that order, the time of four evs is here and workhorse isn't. In position to take advantage of that on the commercial delivery front, and then this is where it gets really exciting at current prices, this could be a good opportunity to hop on the workhorse stock train and, if workhorse lands, the long delayed usps contract even the 2020 All-Time highs for workhorse shares are going to seem cheap.

I personally believe that workhorse could pass 50 60, maybe even 70 dollars per share because of a short squeeze. Currently, the short interest is around 29 and if workhorse wins the contract, all those people would essentially be forced to buy back into the market. Now. I obviously know that things don't have to play out this way, but given the social and political shift favoring evs, i strongly believe that workhorse will win a large portion of the usps contract.

As a quick side note, before we dive into the charts, i think it's safe to say that kathy wood from arkhamvest agrees with me. Her autonomous technology and robotics etf rq currently has 850 000 shares of workhorse, which is up by almost a hundred thousand. Since the last time, i made a video on the company. Clearly, this firm believes in workhorse to the tune of 14 million dollars and in fact, they've been buying more shares on the recent drop instead of selling, which makes me steadfast in my own position.

The stock market just closed for the day and workhorse which trades under the ticker wkhs ended the day at 17.27. This means that from the high on october 12th, workhorses stock is down 38 percent. At this price level, workhorse has a market cap of just under 2 billion. This is relatively small.

Tesla has a market cap of 390 billion and even neo has a market cap of just under 30 billion over the past week. Workhorse is down 14 over the past month, it's down 31, but to be fair from the start of 2020. Until now, it's still up 472, as you can see, workhorse has been slicing through levels of support as if it doesn't even care how much money i have invested in it. It's currently at this support of 17, which was established in this period of consolidation between july and september.

If the recent bearish trend continues and the bull camp can't hold this support, the next one would be at 14.3, which would be an additional decline of 17. If this situation becomes a reality and it's not caused by the usps contract, two things will happen for sure number, one i'll most likely be crying and number two i'll definitely be buying more shares of the company. If this doesn't play out and the stock manages to bounce from here, the first resistance i would be watching would come just under 20 dollars, and that would be a gain of 14. Then, if the bulls continue to express demand, i would be looking at the resistance in the mid-21s, and that would be a gain of almost 25 percent.

To be fair, a lot of workhorses stock performance will be based on the contract announcement, but from a technical perspective. This systematic downward channel is referred to as a bull flag and that's because they commonly break upwards, and on top of that, the rsi or relative strength index is starting to get extremely low. The current reading is 35 and anything under 30 is commonly referred to as oversold, which means that there could be a bounce, or at least consolidation in the near future. This doesn't have to happen, but when you pair up the low rsi reading with the bullish technical structure, it tells me that there's a higher likelihood for the bullish case than the bearish one to clarify, though all this will completely change when the postal service announces their Decision on more of a personal note, i first bought shares of workhorse in late august early september, and my average cost was around 17.

I then bought more shares of the company on this decline. I also bought some call options which are now worthless, but anyway my cost basis is now around 20. It doesn't take a mathematician to realize that i'm currently down on my position, but i hope it's something that i could laugh about in the coming years. When workhorse is at exponentially higher levels, the golden question now is: should i lower my cost basis? I was really close to buying more shares of workhorse two days ago, but i didn't because there's a lot of volatility in the overall market if things weren't so crazy, i definitely would have bought more shares at 17, but i'm trying to minimize my risk up until The election - yes, there is a chance that i may miss this opportunity, but there's also a chance that i might be able to lower my average cost even more by buying around 14.

At this point, it's a pretty tough call of what will happen next technically, i would argue that the chart is favoring the bulls, but who knows when the usps contract will be announced and there's also an upcoming earnings announcement as things develop, both technically and fundamentally i'll? Make sure to keep you updated in future? Videos also keep you posted on what i decide to do with my shares of workhorse. Make sure you have your notifications turned on, so you don't miss any of those updates. Workhorse is a perfect example of why you should always be extra careful with a speculative play. It's a relatively small company, that's not yet profitable, and a lot of its perceived value is tied up with the usps contract.

Volatility is essentially guaranteed in the stock moving forward. Given all the craziness going on in the overall market, i have absolutely no clue what will happen with workhorse in the short term, but in the long term i'm still bullish on the company. It has an excellent management team, a quality product and it's in the ev sector, which is set to explode over the coming decade. Obviously, though these are my own opinions, so make sure to do your own research.

I am genuinely curious on your thoughts about workhorse. Are you viewing this as an excellent buying opportunity, or do you think the stock will continue to plummet? Let me know in a comment below, if you made it to this point in the video you're, an absolute legend in my book. If you want to support my efforts and making more videos like this, it would be greatly appreciated if you could drop a like and don't forget, to join the moon game by hitting the subscribe button and as a quick side note if you're interested in the charting Software that i use there's a link to a free 30-day trial in the description of this video and there's also a link to the weeble trading platform. They're currently running a deal where, if you sign up and make a deposit of 100 you'll receive three free stocks and one could be valued up to sixteen hundred dollars.

I highly recommend checking both out thanks for watching and until next time best of luck in the markets. You.