The Pinduoduo $Pinduoduo Inc.(PDD)$ stock price gained 2.73% on Thursday, 15th Jun 2023, rising from $78.67 to $80.82. It has now gained 3 days in a row. It will be exciting to see whether it manages to continue gaining or take a minor break for the next few days. During the last trading day the stock fluctuated 3.84% from a day low at $80.31 to a day high of $83.39. The price has risen in 7 of the last 10 days and is up by 16.98% over the past 2 weeks. Volume has increased on the last day along with the price, which is a positive technical sign, and, in total, 2 million more shares were traded than the day before. In total, 11 million shares were bought and sold for approximately $897.62 million.
The stock lies the upper part of a very wide and falling trend in the short term, and this may normally pose a very good selling opportunity for the short-term trader as reaction back towards the lower part of the trend can be expected. A break up at the top trend line at $86.21 will firstly indicate a slower falling rate, but may be the first sign of a trend shift. Given the current short-term trend, the stock is expected to fall -8.79% during the next 3 months and, with a 90% probability hold a price between $53.06 and $78.64 at the end of this 3-month period. Do note, that if the stock price manages to stay at current levels or higher, our prediction target will start to change positively over the next few days as the conditions for the current predictions will be broken.
PDD Signals & Forecast
Mostly positive signals in the chart today. The Pinduoduo stock holds buy signals from both short and long-term moving averages giving a positive forecast for the stock. Also, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average. On corrections down, there will be some support from the lines at $76.65 and $67.36. A breakdown below any of these levels will issue sell signals. A buy signal was issued from a pivot bottom point on Thursday, May 25, 2023, and so far it has risen 34.66%. Further rise is indicated until a new top pivot has been found. Furthermore, there is a buy signal from the 3 month Moving Average Convergence Divergence (MACD). Volume is rising along with the price. This is considered to be a good technical signal.
Support, Risk & Stop-loss for Pinduoduo stock
Pinduoduo finds support from accumulated volume at $78.91 and this level may hold a buying opportunity as an upwards reaction can be expected when the support is being tested.
This stock may move much during the day (volatility) and with a large prediction interval from the Bollinger Band this stock is considered to be "high risk". During the last day, the stock moved $3.08 between high and low, or 3.84%. For the last week, the stock has had daily average volatility of 3.78%.
The Pinduoduo stock is overbought on RSI14 and lies in the upper part of the trend. Normally this may pose a good selling opportunity for the short-term trader, but some stocks may go long and hard while being overbought and the RSI is still moving upwards. Regardless, the high RSI together with the trend position increases the risk and higher daily movements (volatility) should be expected. A correction down in the nearby future seems very likely, and it is of great importance that the stock manages to break the trend before that occurs.
Our recommended stop-loss: $78.04 (-3.44%) (This stock has high daily movements and this gives high risk. The RSI14 is 78 and this increases the risk substantially. There is a buy signal from a pivot bottom found 14 days ago.)
Trading Expectations (PDD) For The Trading Day Of Friday 16th
For the trading day on Friday, 16th we expect Pinduoduo Inc. to open at $81.51, and during the day (based on 14 day Average True Range), to move between $77.02 and $84.62, which gives a possible trading interval of +/-$3.80 (+/-4.71%) up or down from last closing price. If Pinduoduo Inc. takes out the full calculated possible swing range there will be an estimated 9.41% move between the lowest and the highest trading price during the day.
Since the stock is closer to the support from accumulated volume at $78.91 (2.36%) than the resistance at $91.94 (13.76%), our systems sees the trading risk/reward intra-day as attractive and believe profit can be made before the stock reaches first resistance..
Is Pinduoduo Inc. stock A Buy?
Pinduoduo holds several positive signals and despite the stock being in a falling trend, we considered it to be a good choice at these current levels. We expect Pinduoduo stock will perform very well in the next 3 months. We have upgraded our analysis conclusion for this stock since the last evaluation from a Buy to a Strong Buy candidate.
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