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For some time, the electric vehicle sector looked as if it were on life support. However, a significant rebound in market leader Tesla (TSLA) along with other positive news items helped rejuvenate sentiment. As a result, investors need to pay close attention to Beam Global (BEEM). An infrastructure specialist focused on the electrification of transportation, the shifting tides couldn’t have come soon enough for BEEM stock.
On Monday, shares gained 18% as investors continued to pile into a key catalyst. Last week, Beam announced that orders jumped 128% on a year-over-year basis in the second quarter. What’s more, over half of U.S. orders originated from new customers. In Europe, the enterprise shipped its first EV ARC system, which is a solar EV charging solution. Combined with broader positive developments in the ecosystem, BEEM stock naturally shot skyward.
Over the past five sessions, Beam’s market value gained over 41%. In addition, Monday’s afterhours session saw BEEM stock swing up around 16%. Clearly, investors can’t get enough of the EV narrative. The best part may be that it might not be too late to jump on the bandwagon.
On a year-to-date basis, BEEM stock is still down roughly 3%, though one has to imagine that will change soon enough. In the past 52 weeks, the equity dropped just over 36%. Technically speaking, shares are still undervalued relative to where they once were. And with aberrant trading activity in the derivatives market, speculators have even more confidence in the opportunity.
Unusual Options Activity Continues Favoring BEEM Stock
Not surprisingly given the aforementioned context, BEEM stock represented one of the top highlights in Barchart’s screener for unusual stock options volume. You can think of this data interface as the pitch count in baseball. By understanding the tendencies of the pitcher (or in this case, the smart money), the batter (or the retail trader in this analogy) can better decipher what may be coming next.
Following the closing bell on Monday, BEEM stock options saw a total volume count of 2,704 contracts against an open interest reading of 6,988 contracts. Further, the magnitude difference between Monday’s volume and the trailing one-month average metric came out to 584.56%. Breaking the transaction down, call volume reached 2,676 contracts, leaving only 28 on the put side.
At first glance, the put/call ratio of 0.01 appears incredibly bullish. To be fair, though, for every option contract bought there is someone on the other end selling the derivative. To get a better understanding of the “true” sentiment, it’s important to consult Barchart’s options flow screener, which exclusively filters for big block transactions likely placed by institutional investors.
Barchart notes that for the July 8 session, the net trade sentiment came out to $9,700; that is, options with bullish sentiment (bought calls, sold puts) featured a higher total premium value than options with bearish sentiment (sold calls, bought puts). The actual figures broke down as $18,100 bullish versus $8,400 bearish.
Keep in mind that BEEM stock on Monday closed at $6.49. Therefore, the options volume overall will be limited. Still, it’s the sentiment that counts – and so far, sentiment has been optimistic, possibly suggesting a continuation of the rally.
Technically speaking, it wouldn’t be surprising to see BEEM stock march higher over the next few months. Granted, there may be periods of volatility. However, what made Monday’s price action significant was that it blasted through both the 50-day and 200-day moving averages.
Not only that, rising volume confirmed the big swing, suggesting that bulls can decisively take control of this market.
Pivot Toward Middle Income May Benefit Beam Global
One of the biggest news items to watch in the wider EV space, of course, is the investment deal between Volkswagen (VWAGY) and Rivian Automotive (RIVN). What’s significant here is the underlying acknowledgement that manufacturers must concentrate on developing mobility solutions for the middle-income crowd.
In prior years, that was problematic because EV batteries were so expensive: only rich folks were able to afford the luxury. However, advanced technologies along with economies of scale has made addressing more modest income groups increasingly feasible. Almost surely, Rivian will leverage some of the investment funds to support its upcoming R2 and R3 vehicles, which are geared toward middle-income buyers.
However, going down the income spectrum creates new challenges. One of them is that such drivers may not necessarily have ready access to home charging. Therefore, as more manufacturers offer reasonably priced EVs, public charging system demand should accelerate.
That suits Beam Global just fine, making BEEM stock a compelling idea despite it already performing so well.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
