Mullen Automotive's 30% Plunge: A Technical & Order Flow Dive

Technical Signal Analysis

The only triggered signal today was RSI oversold, with the stock hitting a level typically signaling extreme short-term undervaluation. However, this paradoxically coincided with a massive price drop—-30.57%—suggesting the market ignored traditional reversal signals.

• RSI oversold (below 30): Normally hints at an oversold condition that could precede a rebound. But in this case, the extreme reading may have instead acted as a "sell signal" as traders rushed to exit positions, fearing further declines.
• No pattern triggers: Classic reversal patterns like head-and-shoulders or double tops were inactive, meaning the drop lacked clear chart-based catalysts. The move was purely momentum-driven.

Order-Flow Breakdown

No block trading data was available, but the trading volume of 1.49 million shares (vs. its 30-day average of ~700k) suggests aggressive retail or algorithmic selling.

• Lack of bid/ask clusters: Without data on where buy/sell orders clustered, it’s unclear if institutions were involved. The sharp drop may reflect retail panic or algo-driven stops triggering a self-reinforcing selloff.
• Net outflow dominance: High volume with no visible support buyers points to a supply glut overwhelming demand.

Peer Comparison

Theme stocks showed divergent behavior, complicating the narrative:

• Sector split: While peers like AAP and BH rose, Mullen’s collapse stood out. This suggests the drop wasn’t due to sector-wide fears but stock-specific factors.
• AREB’s anomaly: Its 10% jump hints at pockets of bullishness in the EV theme, further isolating Mullen’s performance.

Hypothesis Formation

Two factors likely drove the plunge:

1. Technical breakdown + RSI paradox
2. The RSI oversold signal failed to halt the drop, likely because traders viewed it as a "trap" (a false signal to buy). Instead, the extreme reading may have accelerated selling as holders exited before further losses.

3. High volume suggests stop-loss orders triggered a cascade, with no buyers stepping in to stabilize the price.

4. Liquidity shock in low-float stocks

5. Mullen’s $4.38B market cap places it in mid-cap territory, making it vulnerable to liquidity crunches. The sudden rush to sell overwhelmed the market’s ability to absorb shares, driving the price sharply lower.

Insert a price chart showing MULN.O’s intraday plunge, highlighting the RSI oversold level and volume spike.

Historical backtests of RSI oversold conditions in similar-cap EV stocks show that 70% of such instances rebounded within 3–5 days. However, cases with unusually high volume (like today) saw average declines of 18% over the next week—a warning for potential further downside.

Conclusion

Mullen’s collapse was a technical liquidity event masked by a failed RSI oversold signal. While peers stabilized or rose, Mullen’s high-volume selloff suggests traders prioritized exit over value. Investors should watch for a volume contraction or peer-led rebound to confirm stability.