Chanson's 29.5% Intraday Plunge: What's Fueling the Freefall?

Summary
• Chanson (CHSN) slumps to $0.0368, a 29.5% drop from its $0.0522 previous close
• Intraday range narrows to $0.0355–$0.0439 amid 340.59% surge in turnover
• Company announces 80-for-1 reverse stock split and 9.9% passive ownership by Anson Funds
• Sector peers like McDonald's (MCD) dip 0.09% as restaurants sector grapples with mixed momentum

Chanson International Holding’s (CHSN) 29.5% intraday freefall has sent shockwaves through the Restaurants sector, with the stock hitting a 52-week low of $0.0355. The collapse coincides with a corporate restructuring—80-for-1 reverse stock split—and a 9.9% stake disclosed by Anson Funds. While sector leader McDonald’s (MCD) edges lower, the broader market’s uncertainty underscores a pivotal moment for CHSN.

Reverse Stock Split and Ownership Shifts Trigger Investor Flight
Chanson’s 29.5% intraday plunge is directly tied to its announced 80-for-1 reverse stock split and the disclosure of a 9.9% passive stake by Anson Funds. The reverse split, aimed at consolidating shares, has raised red flags about liquidity and investor confidence. Meanwhile, Anson Funds’ 9.9% ownership—coupled with restrictions on warrant exercises—signals a strategic consolidation of control, potentially deterring retail participation. These moves, combined with the stock’s already dire technicals (RSI at 26.71, MACD at -0.0260), have accelerated a flight to safety, leaving CHSN isolated in a sector where peers like Anheuser-Busch (BUD) rally.

Restaurants Sector Mixed as MCD Trails Broader Market
Defensive Rotation and Cash Management in a Bearish Landscape
• 200-day MA: $2.3459 (far above current price)
• RSI: 26.71 (oversold territory)
• MACD: -0.0260 (bearish divergence)
• Bollinger Bands: Price clings to lower band at $0.0537

Chanson’s technicals scream short-term capitulation. The stock is trapped below its 30D and 100D moving averages, with RSI in oversold territory but no immediate reversal signs. Key support levels at $0.0522 (previous close) and $0.0355 (intraday low) are critical to watch. Given the absence of leveraged ETFs and a barren options chain, cash management or defensive plays in sector leaders like BUD make more sense. Aggressive traders might consider shorting CHSN against its 200D MA, but liquidity risks remain high.

Backtest Chanson Stock Performance
The stock CHSN has experienced a 30% intraday plunge on August 15, 2020. Following this event, the stock showed a mixed performance over various time frames. In the short term, the 3-day win rate was 50.56%, indicating that the stock recovered by more than 30% in half of the cases. However, the 10-day win rate was slightly higher at 58.80%, suggesting that more cases recovered within 10 days than in 3 days. The 30-day win rate was 64.42%, showing that the majority of cases recovered by more than 30% within 30 days.

Immediate Action Required: Watch for $0.0355 Floor Test
Chanson’s 29.5% drop signals a breakdown in both sentiment and structure. With RSI at 26.71 and MACD in bearish territory, the stock faces a grim near-term outlook. Sector leader McDonald’s (MCD) dipping 0.09% highlights divergent investor priorities. Immediate action: monitor the $0.0355 intraday low as a potential floor and assess whether the reverse stock split and ownership consolidation resolve or deepen the crisis. For now, cash preservation and sector rotation into BUD’s defensive position are prudent steps.