Polestar Stock News and Forecast: PSNY shares break through post-merger wedge in healthy uptrend

PSNY Stock News and Forecast: Polestar subdued after $10.34 double top

  • PSNY stock has rallied on the back of analyst positivity.
  • Polestar received a $13 price target from Citi.
  • PSNY advanced 4.8% on Monday as technicals improve and new models are unveiled.

Polestar (PSNY) stock confirmed its uptrend on Monday with a 4.8% rally to $9.83. Last Thursday PSNY shares broke through the upper trend line of the falling wedge structure it had been trading in since right after its merger with Gore Guggenheim (GGPI), a special purpose acquisition company (SPAC), on June 27.

Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries

Polestar stock news

Polestar, jointly owned by Sweden’s Volvo and China’s Geely Automotive, has not had a great post-SPAC experience, but it has only been a little over six weeks. The market does not seem to know what to do with the Swedish-designed, Chinese-built automaker, and shares have dropped to support around $8.64 on three separate occasions.

Recent murmurs from the analyst community, however, have begun to make waves. First, on August 1, Deutsche Bank was the first out of the barrel with a price target of $10 and a Hold rating. The rating seemed at first to confirm the market’s misgivings about yet another EV startup IPOing at a time of economic turmoil, but the price target was a good 12% above the current share price.

PSNY stock began to trend upward quite slowly. Deutsche’s main point was that the backing of Volvo and Geely, which itself owns about 10 different vehicle brands including Volvo, should reduce manufacturing and supply setbacks and allow the automaker to bring new models to market at a faster pace than other new brands, such as Nio (NIO), Rivian (RIVN) and Lucid (LCID).

Citi then gave PSNY a Buy/High Risk rating and slapped on an even better $13 price target on August 3. Analyst Itay Michaeli enumerated some of the same points as Deutsche, such as its experienced parent companies and its asset-light model, but also said he thinks Polestar is well-positioned to keep a 6% share of premium EV revenue heading into 2030. “Looking ahead, we see market share catalysts in the US and China from the upcoming Polestar 3 and Polestar 4 launches,” Michaeli wrote.

Polestar delivered 21,200 vehicles in the first half of 2022, which was a 125% growth rate over the previous year’s period. Management says they are aiming to deliver a total of 50,000 vehicles in 2022 and will unveil the Polestar 3 sometime in October.

Polestar stock forecast

Polestar stock breaking through the top trend line of the wedge on Thursday, August 4, at first faced resistance. The trend appears to be in place from Monday’s advance though, and PSNY is up once again in Tuesday’s premarket.

Monday’s price action found support at the 21-day moving average before rebounding higher. This is a good sign for bulls. The 9-day moving average remains below the 21-day average but the Moving Average Convergence Divergence (MACD) has crossed over in another bullish sign.

The first target for bulls is the $10.50 level, which acted as resistance three times between June 29 and July 18. Above there sits resistance at $12 from June 27. Support remains at $8.64.

PSNY stock chart

PSNY daily chart