Shares of AgriForce Growing Systems (NASDAQ: AGRI) surged by over 100% on Wednesday as huge buying volumes were seen over increased investor confidence as AgriForce closed a deal to acquire an AgTech European Consultancy. However, Agri lost its gains from the early trading hours, where it was over 200% higher.
Should you buy Agri now or is it too late? Here is what the charts are indicating.
After consolidating in a sideways trend Agri gave a huge move on Wednesday and has broken through almost all the resistance levels.
The move can be only mainly due to the hype around the news and the stock could come back down to the trading levels on Tuesday in no time thus investors have to be cautious by setting a stop-loss.
Agri formed a huge wick on Wednesday as it reversed from $7 and fell almost 50% from the day high, this could be an indication that buyers may not be as strong for too long and Agri can crash in price as well.
The RSI was in an extremely overbought zone as well, this is also indicating towards a corrective move and numerous buyers could book profits as well which could cause the stock to topple down in price.
Entering at $4 could be very risky for investors as it is 100% higher than Tuesday and many investors could book their profits soon.
This stock should only be for investors willing to take on a significant amount of risk thus a high target of a new all-time can be set, however, it does seem unlikely that a new all-time high will be hit.
A closer look at the charts on Wednesday.
Agri formed a double top on Wednesday and also reversed by falling with a lot of momentum, leaving a lot of late entrants with heavy losses.
Investors can look for buying opportunities after Thursday when the RSI comes down from the overbought zone.
Conclusion
Investing in Agri is very risky and thus investors must maintain a stop-loss and have to keep caution of sudden moves. Investors can look for long opportunities after Agri corrects and the RSI comes down from the overbought zone.
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