Shares of UP Fintech (NASDAQ: TIGR), a Beijing-based online brokerage firm that focuses on global Chinese investors, traded notably lower on Thursday.
The catalyst for the selloff was a new rule that impacts how Chinese citizens invest in foreign markets. The new rules start on Nov. 1 and represent another case of regulatory risk from Beijing. While caution is warranted, the long-awaited reversal may finally be not too far and could only be a matter of time until the downtrend in UP Fintech stock ends.
TIGR has fallen by over 75% from its highs in February, and had a sharp fall after the double top it made in June.
TIGR had extremely high selling volumes on Thursday, thus it is looking very weak, Nevertheless, a reversal could still be seen soon.
RSI was in the oversold zone on Thursday, this is hinting towards a reversal however if the selling volumes remain this strong, the RSI may fall even further.
A strong demand zone can be seen at $7.5, this is an extremely crucial zone as going below this level could be the point of no return for TIGR and could be the confirmation of the stock sinking slowly.
A long entry should only be taken if a clear return is seen, which will show that the buyers are back at the demand zone, an early entry in TIGR could be very risky since it is a very weak stock.
If a reversal is seen we may be able to achieve some great targets in the long run, starting with $12.57 as the first target.
Investors should note that this is a risky trade thus positions should not be taken in large quantities.
UP Fintech daily chart analysis
In the early trading hours of Thursday, selling volumes were very high however they slowly died down in a couple of hours as the price approached the demand zone, this is a great sign for investors as buyers are slowly increasing.
If the shares close higher on Friday that would be a very promising hint towards a reversal, and investors could start buying into TIGR.
If a long position is taken investors have to be very cautious as TIGR is very volatile, thus a stop loss below the demand zone must be kept at $7.05
Conclusion
A long entry at such a low price could yield some great returns, in the long run, however, a reversal must be waited for and investors must make sure to not get in too early otherwise they risk getting caught in another downfall. The first target can be kept at $12.57 alongside a stop loss of $7.05.
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