Canoo (GOEV) is an American Electric Vehicle company planning to sell electric mini vans in 2022 and then expanding their commercial production. The company advertises itself as the electric lifestyle, sport, and working vehicles. Vans for vehicle rental and ride sharing services are in their future plans.
The cool thing about Canoo is the chassis platform. Every vehicle has the same chassis. So when you sell the car, someone else could take off the pickup truck portion and slap on the lifestyle vehicle portion. As an owner you could do the same if you so wish. A really cool concept and plays a role in creating a greener planet while also reinventing the automotive industry.
2022 will be a big year for them when they launch their first product for sale.
Now my readers know me. I prefer reading price action on the charts. Many trader and investor friends have been asking me about Canoo. To be honest, I had never heard of them, but the concept seems great. The vehicles don’t look too bad with their futuristic look. So I began to dig deeper. And that is when I saw this:
A 32% short percent of float, or 32,790,000 shares short out of 99,530,000 on Canoo. The shares outstanding is 237,000,000. The difference between Shares Outstanding and the Float? Outstanding shares include those held by shareholders and company insiders. Floating shares indicate the number of shares actually available for trading.
Do you all remember those short squeezes on AMC and Gamestop? Well their short percentage of the float was around the same number. Look what happened there. The difference from then to now? Lot of traders believe government checks had a lot to play in previous short squeezes. Many people were staying home and using their checks to buy stocks. In a nutshell, it will be difficult for AMC and GME to get another retail short squeeze because everyone who wanted to buy the stock, has bought. It will be hard for new buyers to come in…especially if government checks are not in the equation.
Let’s be honest, when was the last time you saw or read any WallStreetBets headlines? It has been awhile. When I go to their reddit site, I am not seeing much tickers and short squeezes like the good old days. I see memes, people lamenting they lost their life savings, some anger towards Robinhood, and the trades that are mentioned are with larger stocks such as Tesla or actual SPY contracts. Things have changed.
When I look at GOEV, it is a chart that would be on my watchlist based on market structure principles regardless of the short squeeze element. It definitely adds to the potential upside, but as mentioned, does WallStreetBets even have the interest to squeeze now? If they do, this is a prime candidate.
Technical wise, we have evidence that the downtrend is ending, and a new uptrend is about to begin. Our downtrend slope is broken, and the potential to retest it remains. I would be watching for that sometime next week. Alternatively, a break above recent highs of $9.00 triggers the next leg higher. Perhaps an overall US Stock Market recovery provides the catalyst for this to happen.
In summary, Canoo has evidence of basing and a reversal seems imminent. Fundamentally, electric vehicles is a sector many have their eyes on, and the company has a product which will be available to consumers next year. The potential of a short squeeze is the cherry on top, and any rise in the share price would shake out the weak hands. Shorts would cover adding to more upside momentum. Come on WallStreetBets! Let’s make it happen!
