Archer Aviation Inc. (NYSE:ACHR) has just flown into a technical milestone — its 50-day simple moving average has crossed above its 200-day moving average, forming a Golden Cross.
This technical signal, often viewed as a harbinger of bullish momentum, has investors buzzing. But in the volatile world of electric vertical takeoff and landing (eVTOL) aviation, is this a true liftoff or just turbulence ahead?
Chart created using Benzinga Pro
Archer stock has seen a meteoric rise in recent months. In November alone, the stock soared 200%, peaking at $9.75, fueled by speculative frenzy and promising developments in its eVTOL technology. However, the rally lost altitude quickly, with shares plummeting 25% in a single session.
Despite this volatility, the stock remains a favorite among retail investors, with Reddit forums buzzing about a potential short squeeze. A high short interest of 23.62% has added fuel to the speculative fire, making every move a spectacle.
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Why The Golden Cross Matters
The Golden Cross is often seen as a confirmation of a sustained upward trend. Archer's stock, now trading around $6.75, has also held strong above its 20-day and 50-day moving averages, reinforcing a bullish sentiment.
The Moving Average Convergence Divergence (MACD) indicator at 1.13 and a Relative Strength Index (RSI) of 58.94 suggest further room for upside without venturing into overbought territory.
Can Fundamentals Catch Up?
Archer is making strides in the eVTOL space, with its prototype Midnight garnering attention and a recent non-binding agreement for 100 aircraft from a Japanese joint venture.
However, its financials paint a different picture — a $338 million net loss year-to-date in 2024 highlights the cash-burning nature of early-stage aviation.
What's Next: While the Golden Cross signals potential, Archer's near-term trajectory will likely hinge on broader market sentiment and any catalysts tied to eVTOL adoption. Investors should keep a close watch on both short interest dynamics and updates on firm aircraft orders.
For now, Archer is riding high on technical momentum, but it remains to be seen if the bulls can keep it airborne.
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Image: Courtesy of Archer Aviation, Inc.
