The Joby Aviation stock price has bounced back and surged to a high of $7.30, its highest level since July 14. It has jumped by almost 60% from its lowest level this year, giving it a market cap of over $5.4 billion, making it the biggest player in the electric vertical takeoff and liftoff (eVTOL) industry.
Joby Aviation stock has the momentum
The daily chart shows that the Joby Aviation share price has been in a strong bull run in the past few weeks. As it jumped, the stock moved above the important resistance level at $6.60, its highest level on October 23rd. Moving above that level helped the coin invalidate the forming double-top pattern.
Joby has moved above the 50-day and 200-day Weighted Moving Averages (WMA), indicating robust demand. It has also moved above the Ichimoku cloud indicator.
Meanwhile, JOBY shares have jumped to the strong pivot reverse point at $7.03, meaning that it has more room to rally before getting to the extreme overshoot level of $8.60.
Joby Aviation stock’s oscillators have all pointed upwards in the past few days, a sign that it has a bullish momentum. The Relative Strength Index (RSI) has risen and is approaching the overbought level of 70, while the MACD indicator has jumped above the zero line.
Therefore, there are rising odds that the JOBY share price will continue rising in the coming days as bulls target $8.60, which is about 22% above the current level. Most of this upside will be confirmed if the stock jumps above the key resistance level at $7.67, its highest level in July.
A closer look shows that the stock is in the process of forming a cup and handle pattern, a popular continuation sign. As such, by measuring the distance between the upper and lower side of the cup, we can estimate that the stock will ultimately rise to $12.73.
The bullish view will become invalid if the stock drops below the psychologically important support at $5.
Joby has made progress
The Joby Aviation stock price has jumped, helped by the strong progress that the eVTOL company has made in the past few years.
First, the company has a long partnership with Toyota, a company that has perfected the manufacturing process in the past decades Last month, Toyota announced that it would invest another $500 million in the company. Joby hopes to use these funds in the certification and manufacturing process.
These funds, together with the $710 million it had in cash and short-term investments and the $222 million it raised recently, brought its total hoard at over $1.4 billion.
Second, the company has created prototypes that have made progress in the certification process. Joby has already cleared the first three stages of certification, which include certification basis, means of compliance, and certification plans.
It now has two stages remaining: testing and analysis and show and verify. The management hopes that the certification process will be completed by 2025.
Key concerns for JOBY remains
A key concern is that Joby Aviation will need to raise additional cash in 2025 or early 2026 since it is losing substantial sums of money. The most recent financial results showed that Joby Aviation’s net loss rose to over $143 million in the last quarter and $361 million in the first nine months of the year.
The other big concern is whether there is a strong demand for eVTOL aircraft in the first place. Estimates are that the eVTOL industry was valued at $1.2 billion in 2023, a figure that will hit $170 billion in 2034.
If these estimates are correct, it means that the company will be in a pole position and have a dominant market share. The challenge, however, is that these estimates are all based on hypotheticals since this is a new industry.
The other key concern is that the industry is getting highly competitive, with names like Bell Textron, Archer Aviation, and eHang being in a pole position. In China, XPeng has announced plans for its AeroHT, which it hopes will have a leading market share.
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