Why C3.ai (AI) dropped so much on 07 Feb 2023? Is the AI hype over? Or companies focus shifted?
From my 07 Feb 23 article prediction for C3.ai (AI) which has a STRONG BUY signal, but it dropped more than 10%. I will try to explain in this article what I think might have happen and how I can take this lesson and see how to make the predictive model understand this lesson better.
AI Hype
C3.ai (AI) has gained more than 5% on 06 Feb 23, as we can see that there was a huge BUY volume when trading start, and it was trading above VWAP, hence, explained why the raise in their prices.
But it was different when trading starts on 07 Feb 23, we can see SELL volume greater than BUY volume within 1 hour of trading, though it was trading near VWAP, briefly above at around 10pm, but it never picks up for the rest of trading session. SELL volume is greater than BUY volume, this could be due to investors cashing out from their earlier bought shares on 03 Feb 23.
Hence, this bring me to recognise that the predictive model results should be used as a guide, support, and resistance.
07 Feb support was at 26.19, resistance was at 30.04. When market open, it was already trading below the support(25.84), hence, it is an indication whether the BUY signal is going to be valid.
Summary
This is a good example of using my predictive model as a tool, to see if the stock is worth trading on actual session. Depending on the tool information (Signal, Support, Resistance) alone, will not help us. It might lead us onto the wrong side.
Support and resistance would be a good guide to see how the price and volume are moving. Maybe I should look into how the predictive model can predict the exit of a rally due to hype, how long is the duration before we sell heavy sell volume?
I shall share more on the feasibility in future when I start working on it.
Appreciate your comment and like if you find this article useful.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Technical Analysis, and there are many other indicators that need to be look at together. (e.g., Price Action).
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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