What's going on moon gang, i hope you're having an awesome day. My name is matt and on this channel we work together to make better stock market decisions in this video i'll be discussing workhorse because well, its stock seems to be falling off of a cliff i'll. Be doing a technical breakdown of workhorse, so we have a better idea of when it might bounce make sure you stick around until the end, because i'll also briefly be covering an update on lordstown motors. But before i get into all of that, if you're new to the channel don't forget to join the moon gang by hitting the subscribe button, it would be much appreciated if you could help me out on my road to 5 000 subscribers also, it would be great If you could drop a like, because it really helps with getting this video in front of other people and now with that out of the way, let's get started, alrighty here's a look at workhorses daily chart, workhorse trades under the ticker wkhs and, as you can see Here the stock has been doing the best in the month of october.

In fact, starting on october 12th, there were eight straight red days, but when the market closed for the day, workhorse was up just a little bit and was at twenty dollars and 34 cents. The action was a little light today, with 7.5 million shares traded and the average volume over the past 10 days has been 27 million. I think this could potentially be important and i'll dive into that in just a little bit. The market cap of workhorse is currently sitting at 2.3 billion dollars and from 2016 to 2019, workhorse has not produced a profit and last calendar year it actually lost 37 million dollars, even though workhorse hasn't been performing the best lately over the past three months.

It's still up 29 over the past six months, it's up 730 and from the start of 2020. Until right now, it's up 566 percent. I think it's good to call these numbers out, because it gives you a little bit of perspective on how the recent decline might not be as bad as you envisioned, speaking of which, since the start of october, workhorse is down 19. And then, since this high on october 12th, it's down 27, if you've seen my previous videos related to workhorse you'll, be familiar with this technical analysis from the start of september, until mid-october workhorse was caught in this wedge structure, it was putting in higher lows and lower Highs and then it was able to break upwards on excitement from the usps contract and some comments made by analysts at roth.

Unfortunately, the usps contract was delayed and roth retracted. Their comments and the stock has followed this top trend line all the way down to 19. It's no secret that if you're a workhorse investor, this sell-off has been extremely painful. I personally first bought shares of workhorse back in august and then i bought more shares when i thought the stock was going to bounce here in mid-october.

I'm currently break even on my position, but i can definitely empathize with the fact that a lot of profits vanished into thin air over the past two weeks. In fact, now that i really think about it, i'm actually down on this position, because on october 16th i bought some workhorse calls and now the most likely expire worthless. But with that being said, i do see some light at the end of the tunnel. There is support at 19.5, then we have the top of this range around 18 and of course, we have this low that actually started the wedge structure just below 17, when you pair the fact that there's a lot of proven support, relatively close by with the rsi Being pretty low, we have the makings of a potential bounce in the near future and as another piece of evidence, the volume is extremely low, which is telling me that the sellers are getting tired.

Now, i'm definitely not saying that the stock has to bounce immediately. It could in fact, continue down to 18, which would most likely get the rsi below 30, which would mean that it's officially oversold or the bull cam could come in next week and decide that there's enough value at these prices and shoot the stock upward. Based on the dramatic nature of this sell-off, you could watch this first resistance at 21.8, but i would mainly be concerned with the resistance at 22.5, which would be a gain of 11. If the recent sell-off ends up becoming an incredible fluke and the bull camp really gets their stuff together, you could then watch your resistance at 25, which would be a gain of 23, as things currently stand from a technical perspective.

I am favoring the bulls, but you should know, there's always potential for more downside and it is very difficult to catch a falling knife. I'm favoring the bullish outcome for a few reasons. The first is that the recent sell-off had a lot to do with the psychology of retail traders. When the usps contract was delayed, a lot of traders got ansi, so they sold their shares, which prompted more traders to sell their shares and so on.

Nothing has fundamentally changed about workhorse, which brings me to my second reason. The usps contract is still going to be announced within the year 2020 and it really seems as if workhorse is gearing up for something big they're hiring more employees, and they have that well-known partnership with hitachi. I strongly believe that there's a high likelihood that workhorse could win a large portion of the usps contract and, third, more specific to the technicals. The rsi is starting to get pretty low and the volume is getting super light.

These are hallmark signs that the bears are starting to get tired personally moving forward, i'm planning on buying more shares of workhorse if it ever returns to the support at 18. I wouldn't start really worrying unless it breaks that region around 15. If you think this is a good plan or bad plan, let me know in a comment below i'm truly curious about how you're handling this current situation and, of course it's never a complete workhorse video. Unless you talk about lordstown motors, so now, let's quickly switch gears and see what's going on with that company.

For those of you who don't know, the ceo of lordstown motors was the previous ceo and founder of workhorse. Workhorse has a 10 equity stake in lordstown motors and will be receiving a royalty on the first 200 000 vehicles sold. Lewistown is another spac play and on thursday october 22nd it was announced that the merger was approved on october 26th. The combined company's common stock and warrants are expected to start trading on the nasdaq global psych market under the new ticker symbol ride.

Not only is this a big milestone for lordstown, but it will be a positive bump for workhorse, because since the unveiling of the endurance, lordstown motors has secured 1.4 billion dollars in pre-orders. I'm not saying that this merger going through will send workhorses stock to the moon. But the eventual increase in revenue will definitely help with workhorses fundamentals. If there's enough interest, i would be more than happy to start making technical analysis videos on lordstown once it switches from dphc to r-i-d-e.

If that's something that you would like make sure to, let me know, honestly, i'm pretty surprised by the magnitude of workhorses recent selloff. Now don't get me wrong. I fully understand that the usps contract prompted a lot of excitement and the stock was most likely overvalued, but this decline has been absolutely brutal now moving forward. I am still bullish on workhorse and that's because nothing has changed.

Fundamentally, in fact, workhorse is hiring more employees. They're partnering, with hitachi and they're still in contention for winning a large portion of the usps contract. I strongly believe if you have a long enough time frame and can stomach the drawdowns workhorse will produce massive returns in the coming years. But with that being said, these are my own opinions and i'm not a financial advisor so make sure to do your own research.

I would love to know your thoughts on workhorse stock in a comment below. Are you pulling the rip cord or are you viewing this? As an excellent buying opportunity, if you enjoyed this video - and you want to support my efforts in making more there's a few things, you could do to help me out, you could drop a like leave a comment and join the moon gang by hitting the subscribe button. All that engagement really helps with the youtube algorithm in getting this video in front of other people and as a quick side note, if you're interested in my charting software, there's a link to a free 30-day trial. In the description of this video, thanks for watching and until next time best of luck in the markets, you.