Wah Fu Education Group (WAFU) Stock Jumped 598% Overnight; What Happens Now?
If you’ve read our articles about penny stocks, you might remember Wah Fu Education Group (WAFU Stock Report) from late last year. This was the last time shares of WAFU stock broke out bit. At the time, it rallied from $1.42 to highs of $6.24, closed at $2.75 and slowly fizzled back to $1.50.
What Does Wah Fu Education Group (NASDAQ: WAFU) Do?
If you hadn’t guessed by now, Wah Fu Education Group is involved in education. Specifically, it provides online exam preparation services and related technology solutions. It also produces online training course materials in China.
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At the time, the company announced a partnership with Chengdu Neusoft University to develop an online education platform. Unbeknownst to most of the world, this move proved relevant in light of coronavirus shutting down everything from businesses to schools this year. One of the big contributing factors to WAFU stock’s breakout besides the news was its share structure.
Should WAFU Be On Your List Of Penny Stocks To Watch Right Now?
If you look at it currently, shares outstanding shows less than 6 million. Considering the publicly traded float is equal to or less than the O/S, this could easily be considered a low-float penny stock.
Over the months that have followed the November breakout, WAFU stock has seen its share of sporadic trading. More appealing to day traders, the penny stock hasn’t really established a long-term trend. That is, until the last few weeks. Starting on May 11, WAFU stock began breaking above historic levels of resistance. First, it broke above its 50-day moving average then through the 200-Day.
But in all cases, WAFU stock hasn’t had a tough time breaking resistance in my opinion for the simple fact that there really hasn’t been much trading volume. WAFU stock is so thinly traded that from May 11 to June 10, it moved as much as 81% trading a total of just over 1 million shares.
Now, you tell me how “hard” it’s been for WAFU stock to rise. For all intents and purposes, WAFU is an incredibly, thinly traded penny stock. So for starters, if WAFU stock is on your list, be well aware of its low float and history of movement on very light volume. This can work for and against you as a trader and it can come quickly.
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Had this been any other day, I might add that this is a huge move and one that may attract attention from more traders. But given the current state of small-cap and micro-cap stocks, it’s kind of just another day. Why do I say this? Well, this year we’ve seen set-ups almost identical to WAFU stock on Thursday.
In this case, shares closed on June 10 at $2.22 and before the opening bell on the 11th, reached premarket highs of $15.50. That’s 598% overnight. Could WAFU go higher? Obviously we’ll see where everything stands at the end of the day on June 11th. As of this article, there’s been no news, no filings, and no clear catalyst so far as to why this is moving. But this isn’t new and lately we’re seeing parabolic breakouts more frequently.
This week, another Chinese penny stock ran from a previous close of $2.95 to next-day-highs of $30. Jiayin Group Inc. (JFIN Stock Report) was definitely a high-flyer this week that produced short term opportunity but ended badly. By the close on Thursday, JFIN stock had dropped from $30 to $5.80. Prior to that, we saw Immuron Limited (IMRN Stock Report), albeit with a news catalyst, jump from a previous close of $2.10 to next-day-highs of $28.99. Enochian BioSciences Inc. (ENOB Stock Report) lept from a previous close of $4.12 and climbed to highs of $13.43 the next day. Also, who can forget Liberty TripAdvisor Holdings (LTRPB Stock Report) from April running from $4.99 to highs of $134 in the same day?
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It’s also worth noting that this week, a small-cap, low-float stock (not a penny stock) Fangdd Network (DUO Stock Report) moved from $10 to highs of $129.04 in the same day. Chinese stocks and low-float penny stocks seem to be on fire right now. For WAFU stock on Thursday, we’d like to know from you. Is this another 1-day jumper or could this be the first penny stock to actually sustain a longer-term move?
Is WAFU One Of The Penny Stocks To Buy Or Avoid Right Now?
This is the question on everyone’s mind during premarket trading on June 11th. We have to look at this logically as others could end up becoming bag-holders trading on emotion. First, Wah Fu hasn’t released any new nor has it posted any updated filings. The focus on Chinese Education stocks on Thursday has also seen the likes of Tarena International, Inc. (TEDU Stock Report) and Ambow Education Holding (AMBO Stock Report) moving premarket.
Here’s Something To Consider As A Possible Catalyst For Chinese Education Stocks
NetEase is a Chinese internet giant but its brand name might not be that well known out of its home market. The company carried out a secondary listing in Hong Kong on Thursday raising $2.7 billion. NetEase is the second-largest online gaming business in China second to Tencent. Despite most of its revenue coming from gaming, NetEase also has an online education product.
Known as Youdao its revenue was $76.5 million in the first quarter, a 139.8% rise from the same period in 2019. According to reports, this unit is growing fast. Youdao’s revenue was around $76.5 million in the first quarter. This was a 139.8% rise from the same period in 2019. So, are stocks like WAFU, AMBO, and TEDU simply moving in sympathy with the NetEase news or are there some other catalysts to consider right now? Either way, WAFU has broken out big on Thursday. Will it close green or red from the opening bell? Comment Below.