The MULN stock price pumped by more than 30% on Monday after the company secured exclusive distribution rights to I-GO EV in Europe. Mullen Automotive shares rose to a high of $0.50, which is about 140% above the lowest level this year. Its market cap jumped to more than $191 million.
Is Mullen Automotive a good buy?
Mullen Automotive is a small company that aims to be a good player in the electric car industry. The firm focuses on growth through acquisitions. Some of its top brands are companies like Bollinger Motors, Mullen Five, Dragonfly, and Mullen I-Go. It also invests in battery technologies. The company is investing in solid-state battery technologies.
In a statement in August, the company said that its battery will have a 150-kilowatt hour, meaning that it is expected to deliver more than 600 miles of range in a full charge. This is a significant number since most EV cars have a relatively lower range.
MULN stock price jumped on Monday after the company secured exclusive sales, distribution, and branding rights for I-GO in European countries. I-GO has a range of 124 miles and will start selling at $11,999 plus VAT. It will be sold in some of the top European distributors.
So, will the MULN share price continue rising? A closer look at Mullen Automotive shows that the stock rose in a high-volume environment. Over 486 million shares were traded, which was much higher than the average of 98.4 million.
However, it is still unclear whether the shares will continue rising in the near term. For one, it is still unclear whether the company will become competitive in Europe. At the same time, investors are concerned about the company’s strategy for growing through acquisitions. Historically, companies that grow by acquisition tend to underperform in the long term. A good example of this is Salesforce, which has acquired companies like Slack and Tableau.
MULN stock price forecast
The 30-minute chart shows that the MULN share price went parabolic on Monday. It then continued rallying in extended hours, rising by almost 10%. As the penny stock rose, it managed to move above the important resistance level at $0.4590. It also formed several up-gappers and moved above all moving averages. A closer look shows that volume has started dropping.
Therefore, there is a likelihood that the stock will have a bearish breakout in the near term. If this happens, the next key level to watch will be at $0.40. A move above $0.5394 will invalidate the bearish view.