Earlier this month, reversing my initial bearishness towards Churchill Capital IV (NYSE:CCIV) stock, I became a fan of the name . While I’m still concerned about the stock’s reliance on future projections, this SPAC (special purpose acquisition company) appeared to be worth the risk.

How’s the stock performed since that article’s publication? At the time, the shares were changing hands for about 10% above this afternoon’s trading price of $22 per share. In mid-March, the stock briefly rebounded. In hindsight, that turned out to be a “dead cat bounce.”

But Churchill’s underlying “story” hasn’t changed much. The blank-check company is still set to merge with privately held EV startup Lucid Motors. Investors’ excitement about this deal may have cooled a bit.

But, once the deal closes and Lucid increases its production, it could grab significant share from established names like Tesla (NASDAQ:TSLA).

In the last several weeks, however, the market has become less bullish on EV stocks. The vehicle electrification trade, which took off like a rocket in mid-2020, still hasn’t completely died. But, with major names in the sector struggling to bounce back to their prior highs, it’s clear that the enthusiasm for the trade has peaked.

As investors become less bullish on EV stocks, it’ll be tough for Churchill Capital IV to recover in the short-term. Yet, for investors with a longer time horizon, buying its shares at or below today’s prices may still be worth the risk.

CCIV Stock and the Shift in Investors’ Enthusiasm

I still believe that this SPAC’s merger target, Lucid, has the tools to dominate the electric-vehicle space. Between having a Tesla alumni as its CEO, its proprietary technology, and its ample cash reserves, there are good reasons for Wall Street and Main Street investors to be excited about this company’s potential.

However, while it still has these ingredients of success, they may not be enough to help the shares recover in the short-term. Lucid’s many strengths helped to partially justify its epic rise from $10 per share to nearly $60 per share earlier this year. But investors’ off-the-charts, irrational enthusiasm was primarily responsible for the surge.

But irrational enthusiasm doesn’t look to be on the table any longer. As one can see from the performance of CCIV stock and similar names, the sentiment towards the sector has done a 180-degree turn. The sector seemed to have have attempted to recover in mid-March, but popular EV stocks have again sold off after that brief rebound.

And, as Barron’s contended on March 10, the EV bubble could still pop. That is bad news for the EV stocks that are still inflated, from established players like Tesla to early-stage names like Churchill/Lucid.

So, with the sector at a big risk of crashing, why consider CCIV stock a buy today? While I wouldn’t go out and “bet the ranch” on the shares, initiating a bullish position at or below today’s prices and buying more shares if the stock falls further could be profitable over the long-term.

Now May be the Time to Start Accumulating a Position

When it comes to CCIV stock right now, “tread carefully” may be the keyword. However, that doesn’t mean investors should ignore the shares completely at their current levels. As you likely know, timing the market is difficult, if not nearly impossible.

That’s also the case for particular stocks. It may seem as if Churchill, soon to be Lucid stock, is going to fall back to $10 per share before it (possibly) bounces back to $30, $40, or even $50 per share.

But while the valuation of this EV play remains frothy (based on its pro-forma valuation), widespread confidence in it living up to expectations could prevent the stock from falling back below $20 per share. And, if more positive news comes out about the company, we could see the shares attempt to recover again.

In short, don’t try to time Churchill’s bottom. Instead, consider slowly building up a bullish position while the sentiment towards the name remains lukewarm.

Churchill Capital is Down, But Not Yet Out

The speculative mania that pushed this stock higher was bound to weaken. However, that doesn’t mean that this fading “hot stock” is set to crater back to Earth after its short-lived trip to the moon. But it could continue to be weak in the near-term as investors reassess the valuations of EV stocks.

But investors with a longer-time horizon may benefit from starting to accumulate a bullish position at or below today’s prices. Given its potential positive catalysts, CCIV stock could still deliver solid returns over the next few years.

On the date of publication, Thomas Niel did not (either directly or indirectly) hold any positions in the securities mentioned in this article.

Thomas Niel, a contributor to InvestorPlace, has written single stock analysis since 2016.