Nikola Corporation (NASDAQ:NKLA) shares are trading higher Tuesday as a rally in heavily-shorted stocks driven by retail investors continues.
What To Know:
The return of Roaring Kitty to social media has triggered a meme stock revival which has extended to other stocks with high short-interest, including Nikola. According to data from Benzinga Pro, 36.87% of available Nikola shares are being sold short.
Nikola shares may also be driving higher on reports that the Biden administration plans to raise tariffs on Chinese electric vehicle imports from 25% to 100%. Sources familiar with the situation said the administration is expected to announce the tariffs on EVs on Tuesday with additional tariffs on other clean energy imports, including batteries, to follow later in the week.
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Should I Sell My NKLA Stock?
Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.
Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.
Shares of Nikola have lost 15.45% year to date. This compares to the average annual return of -64.33%, meaning the stock has outperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.
Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Nikola stock currently has an RSI of 29.02, indicating oversold conditions.
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NKLA Price Action: According to Benzinga Pro, Nikola Corporation shares are up 5.56% at 58 cents at the time of publication Tuesday.
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