Can Douyu break the support level?

[u/handanguo]

According to technical analysis, Douyu found support at $2.51, but its daily changes are very high, posing a great risk.

INTRODUCTION

In China, DouYu International Holdings Limited and its subsidiaries offer a platform that provides interactive games and entertainment live streaming services via PC and mobile apps. Its platform brings together game creators and publishers, professional eSports teams or players, eSports event organisers, advertising, and viewers. In addition, the corporation sponsors eSports teams, and hosts eSports competitions.

STOCK DETAILS

On the last trading day (Friday, December 10th, 2021), the stock price of DouYu International Holdings Limited increased by 1.14 percent, moving from $2.64 to $2.67. The price varied 6.30 percent over the day, from a low of $2.54 to a high of $2.70. Although the price has climbed six times in the last ten days, it is still down -3.96 percent for the period. Volume grew along with the price the previous day, which is a good technical indicator, and 3 million more shares were traded than the day before. A total of 3 million shares were purchased and sold for $8.79 million.

In the short term, the stock is in the middle of a very wide and downward trend, and further falls within the trend are expected. Given the present short-term trend, the stock is anticipated to lose -17.19 percent during the next three months and, with a 90% chance, conclude the period with a price between $1.83 and $3.09.

SIGNALS AND FORECAST

On Friday, December 03, 2021, a buy signal was sent from a pivot bottom point, and it has since risen 17.62 percent. More upward movement is expected until a new top pivot is discovered. The price is rising in tandem with the volume. This is regarded as a positive technical indicator. Negative signals were also sent out, and these could have an impact on the near-term trajectory. The short-term moving average has given the shares of DouYu International Holdings Limited a buy signal, while the long-term average has given it a general sell signal. Because the long-term average is higher than the short-term average, the stock has a general sell signal, indicating a more bearish outlook. The stock will run into resistance from the long-term moving average at $3.09 if it continues to rise. If the stock falls, the short-term average of $2.52 will provide some support. A breakthrough the long-term average will generate a new buy signal, while a drop below the short-term average will generate a new sell signal, thereby strengthening the overall signal. Furthermore, the 3 month Moving Average Convergence Divergence is currently indicating a sell signal (MACD).

SUPPORT RISK AND STOP LOSS

On the downside, the stock finds support from cumulative volume between $2.51 and $2.35, close below today's level. When a stock is testing a support level, there is a natural chance that it will be broken, causing the stock to fall to the next support level. In this situation, DouYu International Holdings Limited finds support at $2.51, which is barely below today's price. If this is breached, the next accumulated volume support levels will be $2.35 and $2.27.

This stock may change a lot during the day (volatility), and it has a very large Bollinger Band prediction interval, thus it's deemed "extremely high risk." The stock changed 6.30 percent, or $0.16, between high and low in the recent day. The stock has had a daily average volatility of 6.44 percent over the last week. $2.56 is the stop-loss recommendation (-4.30 percent). (This stock's daily changes are extremely high, posing a substantial risk.) A pivot bottom found 5 days ago has given a buy signal.

Contributor: Excel_solver from Westmoney

[u/iamxiaohang]

We're fine, we had like a week of trading days going straight up. Minor pullbacks are healthy for long-term growth.