NASDAQ:FNGR   FingerMotion, Inc.
Chinese stocks are gaining momentum with a bullish zeal after China ended its 2 year long tech crackdown. As a result, Chinese tech stocks could be poised to run this week thanks to this industry wide catalyst. A possible way to capitalize on this potential run could be going long on FingerMotion, Inc. (NASDAQ: FNGR). As a Chinese telecom company with a low float, FNGR stock could result in massive gains for investors this week considering its history to run alongside other Chinese stocks.

FNGR Fundamentals

FNGR is a telecommunication specialist that offers a wide range of products and services. At present, the company offers mobile phones and complementary services such as data plans, loyalty points/redemption services, and subscription plans. As a telecom specialist, FNGR stock could be poised to run as a result of China ending its tech crackdown.

Bullish Fervor

In late 2020, China started its multi-year regulatory overhaul of Alibaba Group Holding Limited (NYSE: BABA) which developed into a crackdown on Chinese tech companies. However, that crackdown appears to have reached its end after the Chinese government fined BABA nearly $1 billion. While one would expect BABA stock to fall as a result of the fine, the opposite happened with BABA stock climbing 9.1% due to the bullish sentiment regarding the end of China’s tech crackdown. This bullish fervor might be a prelude to an industry wide catalyst that could result in Chinese tech stocks including FNGR to run over the course of this week.

Possible Short Squeeze?

A reason FNGR stock could be a prime candidate to run this week due to this catalyst is its short squeeze potential. In late 2022, FNGR launched an investigation into naked short selling that might be occurring in the stock and hired ShareIntel, Christian Levine Law Group, and Warshaw Burstein to oversee the investigation.

The fact that FNGR went through the trouble of hiring these institutions means that there could be a high probability regarding the legitimacy of its claim. If these allegations are true, the stock may soar as a result of a short squeeze due to the end of China’s tech crackdown and its low float of 39 million which makes the stock move quicker on volume.

FNGR Financials

According to FNGR’s 2022 annual report, the company’s assets increased significantly from $10.36 million in 2021 to $17.54 million in 2022. This drastic improvement in total assets was reflected in FNGR’s cash balance which also increased from $461.9 thousand to $9.24 million. It is also worth noting that FNGR’s liabilities decreased during that time from $5.27 million to $4.57 million. Given that the company’s cash balance far outweighs its total liabilities, FNGR is in a strong financial position.

In terms of revenues, FNGR experienced an increase from $22.9 million in 2021 to $34 million in 2022. Having said that, the company’s operating expenses increased from $7.68 million to $8.98 million which could be attributed to the company growing its operations. In light of this, FNGR’s net loss increased YoY from $4.9 million to $7.5 million.

Technical Analysis

FNGR Stock is in a bullish trend and is trading in an upward channel. Looking at its indicators the stock is currently above its 200, 50, and 21 MAs which is a bullish indication. Meanwhile, the RSI is overbought at 79 and the MACD is bullish to the upside.

As for the fundamentals, FNGR stock is likely to run over the course of this week thanks to the end of China’s tech crackdown since Chinese stocks tend to move in sympathy with each other. Given that the RSI is overbought at the moment, investors could expect FNGR to pull back near its $4.71 support as the RSI recalibrates before running again due to the increasingly bullish sentiment surrounding Chinese tech stocks.

FNGR Forecast

With China ending its tech crackdown, Chinese tech stocks including FNGR are likely to soar this week as Chinese stocks usually run together. However, what makes FNGR stock a prime candidate to see more percentage gains than other Chinese tech stocks is the combination of its low float and the likelihood of a short squeeze given that the stock may be seeing naked short selling activity. For these reasons, FNGR is one to watch closely this week for a continuation of its run.


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