China XD Plastics Company Ltd (NASDAQ: CXDC) stock price rallied 198% higher during premarket trading despite not releasing news today.
The plastics company has a wide product range that includes engineering plastics, biodegradable plastics, special engineered plastics and general plastics.
The company’s last major announcement came from Nasdaq, which warned the company that it risks delisting after failing to file its Form 10-K annual report for the 12 months ended Dec. 31, 2020.
China XD plastics request to have its American Depositary Receipts to keep trading on the Nasdaq Global Markets exchange had been denied in early September, causing its share price to fall further.
However, the company’s ADR’s are still trading on the Nasdaq leading to today’s rally.
The rally can be directly attributed to retail traders looking to capitalise on potentially significant short positions by institutions that may have been expecting CXDC stock to be delisted due to the facts outlined above.
Retail traders on social media platforms such as Reddit have pushed CXDC stock to unprecedented highs, which increases the risk of a massive crash for those who buy the stock near its latest highs.
As a short-term trader, you should always be aware of the risk posed by such bullish activity and take measures to ensure you are on the right side of such moves to avoid depleting your trading account.
Significant declines typically follow such parabolic moves.
*This is not investment advice. Always do your due diligence before making investment decisions.
CXDC stock price.
CXDC stock price rallied 198.3% to trade at $1.76, rising from Tuesday’s closing price of $0.59.
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