CCIV stock recovers key technical support: Is Churchill Capital now a buy?

CCIV stock staved off potential disaster in the final two trading days of last week. However, a class-action lawsuit may spoil the party.

Churchill Capital IV Corp (NYSE: CCIV) finished in the green Friday after gaining $0.59 ($2.36%) and closing out the week at $25.55. Furthermore, Churchill Capital stock reclaimed its uptrend and recovered the 100-day moving average.

June had been an incredible month for CCIV shareholders. Buoyed by advancements at Lucid Motors and subsequent analysts upgrades, Churchill Capital gained 48% on the month.

Furthermore, CCIV looked poised to go even higher after finishing the month, close to breaking out of an ascending wedge pattern.

On July 1st, CCIV stock did break higher through the trend line at $29.00. Although in a blink-and-you’ve missed it situation, Churchill stock reversed 8% from the $29.81 high and finished the day with a 7.5% loss.

Within 4 days, the stock was breaking out again, but this time to the downside, falling a further 15% and breaching the support of the 100-day moving average at $24.74 and its recent uptrend.

CCIV Lawsuit

However, once again, CCIV returned to the trend. Although for how long remains to be seen after it was revealed, early investors had filed a lawsuit claiming the blank-cheque company misled the market over Lucid’s projected production numbers.

Allegations against CCIV include that the Company made materially false and/or misleading statements and/or failed to disclose that: (1) Lucid was not prepared to deliver vehicles by spring of 2021; (2) Lucid was projecting a production of 557 vehicles in 2021 instead of the 6,000 vehicles touted in the run-up to the merger with Churchill; and (3) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis. When the true details entered the market, the lawsuit claims that investors suffered damages.

Office of Attorney Vincent Wong, Esq

Whether there are grounds for the claims is not for me to comment. I would rather focus on potential levels that may prove pivotal.

Churchill Capital technical Outlook

The 4-hour chart illustrates both the upside and downside break of the rising wedge formation.

As long as the price remains above the 100 DMA, it will be inside the narrowing pattern. Therefore, $24.74 is a must-hold level for the bulls.
A failure to stay above this marker targets the 50 DMA at $22.52, and following that, May’s $17.25 low.

However, if the CCIV stock price shrugs off the threat of a court case and continues last weeks recovery in today’s session, the top end of the channel at $29.30 is achievable.

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CCIV stock price (Daily chart)

CCIV Stock price

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