MULN stock charges 6% higher on battery testing news, but is this another dead-cat bounce?

• MULN stock is back, baby, as it surges 7% on battery testing news.
• MULN stock announces battery test with Battery Innovation Center, Indiana.
• Mullen Automotive still has many unanswered questions and remains a high-risk play.

Mullen Automotive stock (MULN) is back, and it is rising in Thursday’s regular session. However, we immediately must put a caveat that one of our key signals is in danger of being met. MULN stock spiked nearly 13% higher in the premarket and already has dropped 5% once the regular session opened. This is one of the signals we look for when momentum is fading. So be warned, this could be a very short-lived advance. 

MULN Stock News: Testing, testing, 1, 2, 3

Mullen announced that the Battery Innovation Centre in Indiana will conduct solid-state polymer battery testing on Mullen’s battery. The Battery Innovation Center was started in 2013 and aims to promote rapid development and testing of energy systems.

“We have begun working with the Battery Innovation Center located in Indiana to retest and certify our solid-state battery,” said David Michery, CEO and chairman of Mullen Automotive.  “BIC is a well-respected battery laboratory, and we look forward to publishing their results related to cell testing coming up in May.” 

This will come as welcome news to MULN investors who have been suffering since Hindenburg Research issued a negative report on the company. Question marks remain though in investors’ minds, and that is tempering any significant reaction to this news. For us, this is a long way short of what will make us invest here. It remains highly speculative. Momentum trading requires strong volume to maintain the move, and generally the premarket volume is significantly lower than the regular session. Even from a momentum perspective, this is not yet meeting any of our criteria.

MULN Stock Forecast: Light volume a concern

This is exactly the price action that worries us: a spike in the premarket on light volume that immediately falls back once the regular session begins. Where MULN closes now will be a further sign. The chart is indicating a red candle and so a continuation of the bearish trend. $2.06 remains the pivot. Below MULN is bearish, plain and simple. 

MULN stock chart, daily