Benzinga - by Surbhi Jain, .
Shares of VinFast Auto Ltd. (NASDAQ:VFS) soared recently after reports revealed that the Vietnamese automaker received deposits for nearly 30,000 units of its new electric vehicle (EV) model in under 72 hours.
This surge in interest led to an initial jump of 15% in share prices, adding to the stock’s previous gains.
The stock was up 3% by 2 PM ET on Thursday, May 16. Over the past five days alone, the stock has gained over 30%.
The rally in VinFast’s stock is part of a broader trend seen in heavily shorted stocks following the GameStop Corp (NYSE:GME) ‘Roaring Kitty‘ rally.
Also Read: What’s Going On With VinFast Auto Stock?
VinFast, in addition to making EVs, produces e-scooters and e-buses in Vietnam, Canada, and the U.S.
VinFast stock’s recent ascent is not only limited to its heavily shorted status. Sure, the company has 7.3 million shares shorted representing 14.8% of float. Nonetheless, there are many fundamental and technical aspects, that appear to indicate this rally could be sustainable.
Strategic Partnerships Giving Fundamental Strength
The company’s success is not only limited to its sales numbers but also extends to its strategic partnerships. VinFast recently announced a significant cooperation agreement with Bosch, a leading global supplier of automotive technology. This partnership will grant VinFast customers in Europe access to an extensive network of 700,000 charging points across 30 European countries, enhancing the convenience and confidence of VinFast users as they travel throughout Europe.Moreover, VinFast has been at the forefront of innovation, recently launching Sony Pictures Entertainment’s new online service, RIDEVU, on its VF 8 electric car model in the U.S. This makes VinFast the world’s first automobile manufacturer to launch RIDEVU, underscoring its commitment to providing modern, smart electric car products and superior driving experiences to its customers.
VFS Price Charts Indicate A Strongly Bullish Trend
From a technical perspective, the stock is signalling a bullish sentiment from the traders, over both the short and long-term.Chart: Benzinga Pro
VinFast’s stock is currently trading above its 5-day and 50-day simple moving averages (SMAs), indicating a strongly bullish trend. In fact, the 5-day SMA has recently crossed above the 50-day SMA, indicating short-term bullishness taking over.
Chart: Benzinga Pro
The Moving Average Convergence Divergence (MACD) indicator also suggests a buy signal at 0.10, well above the signal line at -0.16. The MACD has crossed over the signal line in April end, and has been able to sustain such momentum – a net positive for the stock.
However, the Relative Strength Index (RSI) indicates that VinFast may soon be overbought. The RSI is currently at 63.63 and treading upwards. A level above 70 indicates overbought conditions where investors may expect a trend reversal to set in, provided other technical indicators also signal the same.
Analysts are optimistic about VinFast’s future, with a consensus price target of $9.60, implying a 122.24% upside potential from current levels.
Cantor Fitzgerald analyst Andres Sheppard, in particular, holds a Buy rating for the stock, citing VinFast’s inherent price advantage and aggressive expansion strategies as key drivers of future growth.
Despite some technical indicators suggesting overbought conditions, analysts remain bullish on VinFast’s long-term potential, making it a stock to watch in the rapidly evolving EV industry.
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