Arcimoto (FUV) has been a recent favorite within the EV sector and if you look at the chart, it should be no surprise. Clearly capital has been flowing into the stock as evidenced by the picture perfect bullish structure.

The company has been around since 2007 and manufactures a 2 seat, 3 wheeled electric vehicle called the Fun Utility Vehicle. While many like to get wrapped up in the fundamentals of these companies, as a short term swing trade, all we are looking for is price momentum and nothing else. Fundamentals mean very LITTLE for short term momentum based strategies.

Price charts act as a reflection of company internals and how they are PERCEIVED by investors. Since price acts as a discounting mechanism and accounts for all the known information in the world, it is possible to make informed trading decisions without having to spend hours upon hours researching fundamentals.

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Got To Luv FUV.

The broader trend in this stock is clearly bullish as characterized by the series of higher lows and higher highs.

The recent pullback offers a swing trade entry opportunity with attractive reward/risk and favorable probability since price momentum is strong.

This swing trade aims to capitalize on the next leg higher which can unfold over the next week or so. What makes this sector compelling is all of the hype and potential that gets the herd excited. Some random news event can come out and stimulate an over reaction that can propel price into our target zone.

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Here’s the swing trade idea:

Buy Stop: 32.50
Stop Loss: 29.25
Target 1: 34.50
Target 2: 38.50
Target 3: 42.50
R:R 1.8

Since this trend is very strong, it is possible for price to push beyond the low 42s. We place a third target so that we can record an official exit but if you want to manually trail a stop for 1/3 of the position rather than exit at T3, that is another way to further capitalize on bullish potential.

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