China recently announced that it is halving its tax on stock trading effective Monday, August 28th in an attempt to boost its stock market. This announcement could have major implications for Chinese stocks since Chinese ADRs tend to run along with their stock on the Chinese exchange. One of the Chinese stocks that may run this week is FingerMotion, Inc. (NASDAQ: FNGR) given its popularity among traders thanks to its naked short squeeze potential. In light of this, FNGR stock could be an extremely profitable swing trade this week.
FNGR Fundamentals
Looking to boost its stock market and bolster investor confidence, the Chinese government decided to decrease its stock trading tax by 50% from .1% to .05% on August 28th. According to Xie Chen, a fund manager at Shanghai Jian Investment Management Co, this tax cut is set to provide a short-term boost to Chinese equities, however, such a boost will not have much effect in the long run. That said, a short-term boost may be what FNGR stock needs for a naked short squeeze to occur as it may witness higher than average volume. For this reason, FNGR stock is one to watch closely this week.
FNGR Financials
According to its Q1 2023 report, FNGR’s assets decreased QoQ from $17.5 million to $14.5 million mainly due to its cash balance falling from $9.2 million to $5.4 million. This drop in cash is mainly the result of the company’s cash burn since it burned through $2.5 million in operating cash flow in Q1, as well as repaying $1.1 million in convertible notes. As for its liabilities, the company witnessed a decline from $4.5 million to $607 thousand thanks to accrual and other payables falling from $1 million to $453 thousand.
When it comes to revenue, the company experienced a significant YoY growth, increasing from $4.8 million to $12.1 million. This growth was a a result of its telecommunication products and services which generated $12 million in revenue in Q1. It is however worth noting that in Q1 the company’s cost of revenue was $11.5 million which meant that it only generated $662 thousand in gross profits. That said, this figure is a YoY increase from the $377 thousand it reported in Q1 2022. Expenses, on the other hand, remained relatively the same at 1.8 million. As a result, the company’s net loss decreased YoY from $1.4 million to $1.2 million.
Technical Analysis
FNGR stock is in a neutral trend, with the stock trading in a sideways channel between $3.82 and $4.71. Looking at the indicators, the stock is below the 200 and 50 MAs which is a bearish sign, but above the 21 MA which is a bullish sign. Meanwhile, the RSI is neutral at 52 and the MACD is neutral as well.
As for the fundamentals, China’s decision to cut trading taxes by 50% is a major catalyst for FNGR stock and other Chinese stocks. In this way, Chinese stocks could soar over the course of this week. Given the popularity of FNGR stock as a naked short squeeze play, it might run the most out of other Chinese stocks. For this reason, investors could wait for the stock to break through the 50 MA resistance with a pullback to enter long positions to capitalize on the stock’s potential run this week.
FNGR Forecast
Chinese stocks are poised to spike this week following China’s decision to cut stock trading taxes by 50%. This catalyst is likely to incentivize Chinese traders to buy stocks in mass which should reflect on their ADRs. Given FNGR stock’s popularity due to its naked short squeeze potential, it could very well have the best run out of Chinese stocks which makes it one to watch closely this week.
FNGR Fundamentals
Looking to boost its stock market and bolster investor confidence, the Chinese government decided to decrease its stock trading tax by 50% from .1% to .05% on August 28th. According to Xie Chen, a fund manager at Shanghai Jian Investment Management Co, this tax cut is set to provide a short-term boost to Chinese equities, however, such a boost will not have much effect in the long run. That said, a short-term boost may be what FNGR stock needs for a naked short squeeze to occur as it may witness higher than average volume. For this reason, FNGR stock is one to watch closely this week.
FNGR Financials
According to its Q1 2023 report, FNGR’s assets decreased QoQ from $17.5 million to $14.5 million mainly due to its cash balance falling from $9.2 million to $5.4 million. This drop in cash is mainly the result of the company’s cash burn since it burned through $2.5 million in operating cash flow in Q1, as well as repaying $1.1 million in convertible notes. As for its liabilities, the company witnessed a decline from $4.5 million to $607 thousand thanks to accrual and other payables falling from $1 million to $453 thousand.
When it comes to revenue, the company experienced a significant YoY growth, increasing from $4.8 million to $12.1 million. This growth was a a result of its telecommunication products and services which generated $12 million in revenue in Q1. It is however worth noting that in Q1 the company’s cost of revenue was $11.5 million which meant that it only generated $662 thousand in gross profits. That said, this figure is a YoY increase from the $377 thousand it reported in Q1 2022. Expenses, on the other hand, remained relatively the same at 1.8 million. As a result, the company’s net loss decreased YoY from $1.4 million to $1.2 million.
Technical Analysis
FNGR stock is in a neutral trend, with the stock trading in a sideways channel between $3.82 and $4.71. Looking at the indicators, the stock is below the 200 and 50 MAs which is a bearish sign, but above the 21 MA which is a bullish sign. Meanwhile, the RSI is neutral at 52 and the MACD is neutral as well.
As for the fundamentals, China’s decision to cut trading taxes by 50% is a major catalyst for FNGR stock and other Chinese stocks. In this way, Chinese stocks could soar over the course of this week. Given the popularity of FNGR stock as a naked short squeeze play, it might run the most out of other Chinese stocks. For this reason, investors could wait for the stock to break through the 50 MA resistance with a pullback to enter long positions to capitalize on the stock’s potential run this week.
FNGR Forecast
Chinese stocks are poised to spike this week following China’s decision to cut stock trading taxes by 50%. This catalyst is likely to incentivize Chinese traders to buy stocks in mass which should reflect on their ADRs. Given FNGR stock’s popularity due to its naked short squeeze potential, it could very well have the best run out of Chinese stocks which makes it one to watch closely this week.