Current
The stock of the retailer from the U.S. rose more than 12% before the stock market opened today. After the stock market opened, the share price moved even higher and is currently up almost 15%. The long-term downward trend was abruptly interrupted by the share price on January 6, and after the all-time low of $1.27, the share price exploded by about +250% at times reaching $4.50.
The reason for the all-time low was statements by the company regarding the threat of insolvency. Higher loss in the 4th quarter of the past year and high debt make a rescue of the company unlikely.
Despite the gloomy future prospects, however, many investors are once again investing in the bankrupt candidate, thus causing a new short squeeze of the Meme share.
Analysis
In the current upward movement, the price has marked a high at around $4.50 and has thus reached a resistance level at the same time. This served as support several times in July and October last year before the price fell below it. In the rapid rise, no clear support can be defined so far, which is why only the low at $1.27 comes into question here. However, it is possible that today’s daily low of $3.64 could also provide support as the price continues to move, as this level served as support in November and resistance in December. Should the price move above the resistance at $4.50, further rises to above $5.00 could occur. Otherwise, the price could fall back to the $3.64 level and make it a support. However, if this level is broken, we could see further declines.
However, due to the high volatility of this meme stock, great caution is advised when investing in this stock.
