Archer Aviation (NYSE: ACHR) is trading 10% lower today, but don’t mistake this drop for bad news… It’s a buying opportunity.
On Wednesday, the White House issued an Executive Order aimed at accelerating the rollout of electric vertical takeoff and landing (eVTOL) aircraft across the U.S.. This is a major regulatory breakthrough for the entire urban air mobility industry.
Archer stands to be one of the biggest beneficiaries, with its aircraft already in late-stage development. The company’s product is slated to fly during the 2028 Olympics in Los Angeles as the Official Air Taxi Provider of Team USA.
The decline comes on the heels of an $850 million registered direct offering announced Friday. The company sold 85 million shares at $10 each - where the stock has dropped to today - to raise capital.
This move has nothing to do with a negative business shift. In fact, it's a strategic decision to raise cash by issuing equity rather than taking on expensive debt. That’s typically a healthy signal for a company in growth mode to acquire upfront capital as it scales manufacturing, certification, and flight operations.
Short-term traders may balk at dilution headlines. Long-term investors should see this for what it is: “fuel” for takeoff.
Archer Aviation is one of the “Speculative Seven” stocks that we have been tracking for months.
From multiple angles, Archer remains one of the most compelling innovation opportunities on the market:
This kind of post-announcement weakness is a gift for patient traders and investors who understand how the game works.
Shares of Archer are sitting at an incredibly important price point, $10.
All stocks - whether rising or falling – find support or resistance at this price given its psychological effect. Investors, both institutional and retail, often use this price as a trigger to buy or sell a stock. In this case, Archer shares are set to find significant support.
The stock’s 50-day moving average shifted to a bullish trend on May 13 followed by a fast and aggressive 50% rally over five days which landed ACHR stock in a technically overbought situation.
Following a healthy correction, the stock briefly slipped below $10 but then regained the price for another 23% rally.
In addition to the bullish 50-day trend, the stock’s 200-day moving average has been in a bullish trend since early December.
One final check of Archer’s 20-month moving average finds the stock in a long-term bullish trend.
The executive order will garner the attention of Wall Street analysts that are now more likely to begin adding bullish coverage to the stock. That coverage will result in increased long-term investors adding positions in this innovative technology company.
Current prices around the $10 are attractive “buy the dip” levels ahead of what will likely be a short-term rally to $15 over the next 4-6 weeks. From there, we’ll see continued volatility as short-term traders will likely take profits, but the long-term cycle and trend forecast for Archer Aviation remains bullish with a price target of $20.
