Birks Group, Inc (NYSE:BGI) was halted twice to the downside on Tuesday as the stock plummeted over 57% off the high-of-day. Birks has soared over 230% higher between Sept. 23 and Monday but to create higher lows on its ascent, which means it was unable to etch out more recent support levels.
- Birks has an extremely tiny float of just 4.09 million shares and on Tuesday midafternoon over 7 million shares had exchanged hands, which indicates the entire float was traded almost twice over.
- The number seems unbelievable because according to the stock’s statistics, insiders own 61.47% of the float.
- Technical traders may have seen the drop coming because Birks relative strength index (RSI) reached 96% on Tuesday. When a stock’s RSI reaches or exceeds the 70% level it can be a sell signal for technical traders.
- After plummeting, Birks bounced back up over a key support and resistance level at the $3.80 mark.
- Birks has printed a massive bearish engulfing candle, which indicates lower prices may come on Wednesday, especially because the stock has not neared oversold territory.
- There is also a possibility the stock will trade sideways for a period of time to consolidate the move lower.
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