Chijet Motor (CJET.O) Dives 15.57%: What’s Behind the Sharp Intraday Selloff?

The stock of Chijet Motor (CJET.O) experienced a significant intraday price drop of 15.57%, with a trading volume of 7.72 million shares — well above the average. This sharp move occurred in the absence of any notable fundamental news, prompting a deeper look into the technical signals, order flow, and sector performance to uncover the cause.

Technical Signal Analysis

From the technical indicators, the only one that triggered today was the RSI oversold signal, indicating that the stock may have dipped into undervalued territory. However, all other key reversal patterns — including head and shoulders, double bottom, and KDJ signals — did not trigger, suggesting the move is not part of a confirmed reversal pattern.

This raises an interesting dynamic: while the RSI suggests a potential bounce could be on the horizon, the lack of confirmation from other patterns may indicate that the selloff is being driven by something more immediate — such as order imbalances or sector rotation — rather than a long-term trend shift.

Order-Flow Breakdown

Unfortunately, no block trading data or cash-flow metrics (such as bid/ask clusters or net inflow/outflow) were available for analysis. This absence makes it difficult to pinpoint whether the decline was driven by large institutional selling or a sudden wave of retail pressure.

However, the high trading volume relative to the stock’s small market cap (~$7 million) suggests that the move was likely influenced by concentrated selling activity — possibly a large trader unwinding a position or algorithmic selling amplifying the move.

Peer Comparison

Looking at related theme stocks provides some insight. Most peer stocks in the automotive and electric vehicle (EV) space — including AAP, BH, BH.A, and ALSN — also declined in the same trading period, albeit with smaller percentage drops (ranging from -0.15% to -0.34%). This suggests that the drop in CJET.O is not entirely isolated and may be part of a broader theme sell-off.

However, the depth of the move in CJET.O stands out. While peers saw moderate declines, CJET.O’s drop was more than three times greater on average, pointing toward a stock-specific catalyst rather than a pure sector rotation. The divergence implies that internal factors — such as liquidity crunches or order imbalances — are likely playing a key role.

Hypothesis Formation

Given the available data, two hypotheses stand out:

1. Large-Scale Position Unwinding or Algo-Driven Liquidation: The high volume and sharp price drop are consistent with a large investor or automated system aggressively selling the stock. The RSI oversold signal could be a lagging indicator of this rapid sell-off.

2. Liquidity Crunch or Short-Squeeze Misfire: The stock's small market cap and the absence of block trade data suggest a potential liquidity issue. A short-sellers’ panic or a failed short squeeze could also explain the sudden and extreme price movement.