Nikola Corporation (NKLA) saw a notable increase in its stock price today, closing at $1.60, unchanged from the previous day, but experiencing a 1.23% rise in after-hours trading to $1.62. The stock opened at $1.76, reaching a high of $1.79 and a low of $1.53, with a significant trading volume of 27,837,925 shares, which is 324.54% of its average volume. This surge in activity and price movement is attributed to several factors.
Firstly, discussions on Reddit have highlighted a potential short squeeze, with users noting that NKLA is "starting to squeeze" and setting a target price of $2, with the possibility of reaching $5 or beyond. The stock's market cap is under $150 million, and there is a decent short interest, with around 20 million shares short, representing 25% of the float. This has fueled speculative interest among traders looking for a breakout, as indicated by the "second cup & handle" pattern confirmed in premarket trading.
Additionally, the return of former CEO Trevor Milton to social media has caught the attention of traders, adding to the stock's momentum. Furthermore, the Biden administration's announcement of eased tax credit criteria for green hydrogen production has positively impacted hydrogen stocks, including Nikola. The new rules make it easier for companies to obtain tax credits for producing green hydrogen, which is expected to benefit Nikola's hydrogen initiatives.
Moreover, Nikola's recent opening of its first HYLA hydrogen refueling station in California has bolstered its position in the zero-emission transportation sector. This development supports Nikola's strategy to expand its hydrogen infrastructure and enhance the adoption of its hydrogen fuel cell vehicles.