Ideanomics Stock Explodes Higher
Lately, it's been a common sight. A cheap stock, priced in single digits, suddenly rips higher. It's happened to Hertz (HTZ), Genius Brands (GNUS), GNC Holdings (GNC), and several others over the past few weeks.
Traders are excited about IDEX because the electronic vehicle facilitator recently secured an order for 200 EVs. That order is valued at $3.2 million.
Is that news really enough to create the action we're seeing in IDEX? Or, are we seeing the impact of retail traders piling into a cheap stock for a quick profit? Let's go to the chart...
IDEX has suddenly awoken and is tearing higher. Note the increase in the stock's volume (shaded yellow). Yesterday's volume was about 16x the stock's average daily volume.
IDEX's RSI (relative strength index) indicator is heavily overbought at 93.11 (bottom of chart), but this does not mean that the stock's run is over. An overbought stock can always become more overbought.
Some traders are assuming that institutions are buying IDEX, and that's why the stock is moving higher.
However, retail traders might have the power to move this stock on their own. Monday's volume of 362 million, multiplied by the stock's closing price of $3.29, results in a total of about $1.2 billion. That's the total value of all the IDEX shares bought and sold on Monday.
Compare that figure to Apple. On Monday, the total value of Apple shares traded was $12 billion, or 10x IDEX's figure. Here's why Apple's new iOS 14 is a game changer.
When viewed in that context, we can't assume that institutional money is behind this move.
That doesn't mean the stock can't go higher, because it can. However, when all is said and done, it could float back down like the other stocks mentioned above.
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