Mullen Automotive's 30% Plunge: A Technical Sell-Off or Hidden Catalyst?

Technical Signal Analysis

The only triggered indicator today was the RSI oversold, signaling extreme short-term weakness (typically RSI < 30). Historically, this can flag an oversold condition ripe for a rebound. However, in this case, the RSI oversold failed to spark a bounce—instead, the stock cratered by -30.34%, suggesting panic selling or a breakdown of technical support.

Other key patterns (head/shoulders, double tops/bottoms, MACD/crossovers) showed no triggers, meaning no clear reversal or continuation signals. The lack of confirmed chart patterns points to disorganized trading, not a structured trend play.

Order-Flow Breakdown

No block trading data was available, but high volume (1.53 million shares) suggests widespread participation. Without large institutional orders, the drop likely stemmed from retail-driven panic or algorithmic selling.

• Key clusters: Absent block data, focus shifts to price action. The stock gapped down sharply early in trading, hitting a low of $0.32 (vs. open of $0.46). This hints at stop-loss orders being triggered, exacerbating the decline.
• Net outflow: High volume paired with a massive drop implies a dominant sell-side flow, with buyers unable to stabilize the price.

Peer Comparison

The sector showed divergent moves, complicating the narrative:

Key Takeaway: While some EV/tech peers rose (AREB, BH), Mullen’s freefall stands out. This divergence suggests the sell-off is idiosyncratic to Mullen, not a sector-wide panic. However, the lack of positive peer momentum may have amplified its decline.

Hypothesis Formation

1. Technical Breakdown & Stop Losses

• The stock’s gap-down shattered support levels, triggering automated stop-loss orders.
• High volume confirms retail participation, likely exacerbated by meme-stock dynamics (e.g., Robinhood traders).

2. Loss of Faith in "Oversold" Bounce

• Traders may have seen the RSI oversold as a "trap," betting against a rebound. This "short-squeeze" failure could signal lack of institutional interest or deep skepticism about Mullen’s fundamentals.

A chart showing Mullen’s intraday price collapse, RSI dipping to 20 (oversold), and volume spikes during key drops. Overlay peer stocks (AREB, BH, ATXG) for comparison.

Report: Why Did Mullen Plunge 30%?

Mullen Automotive’s stock cratered -30% today in what appears to be a technical sell-off, not a fundamental shock. With no news, traders focused on the RSI oversold signal—but instead of a rebound, panic selling took over.

The Smoking Gun:
- The RSI oversold failed to trigger a bounce, signaling traders no longer trust technical "bottoms" for this stock.
- A sharp early-morning gap-down likely triggered stop-loss cascades, overwhelming buyers.

Peer Context:
While rivals like AREB surged 9%, Mullen’s collapse suggests sector divergence or a lack of faith in its execution. The EV sector isn’t collapsing—Mullen is.

What’s Next?
- Look for a bounce off $0.32 support (if buyers re-enter) or further freefall if stops are cleared.
- Watch for volume drying up, which could signal exhaustion.

Insert a brief analysis of historical cases where RSI oversold failed to prevent further declines. For example, in 2022, 30% of oversold stocks saw additional 20% drops within 7 days if volume surged. Mullen’s pattern mirrors this “oversold trap” scenario.