ELPW.O Plummets 89.5%—Uncovering the Hidden Forces Behind the Sharp Selloff

Elong Power (ELPW.O) experienced a staggering 89.52% drop in a single trading day, far outpacing any known earnings report or news release. This sharp selloff raises urgent questions: was it a technical breakdown, a sector-wide correction, or something more nuanced?

Technical Signal Analysis

Despite the violent move, most traditional technical patterns failed to trigger:

• Head and Shoulders (both regular and inverse): Not triggered
• Double Top/Bottom: Not triggered
• MACD Death Cross: Not triggered
• KDJ Golden/Death Cross: Not triggered

However, the RSI entered the “oversold” zone, which typically signals a potential short-term rebound. This divergence between price action and RSI suggests aggressive short-term selling without an underlying support level to cushion the fall.

Order-Flow Breakdown

No block trading data is available, but the sheer volume of 26 million shares suggests heavy liquidation occurred, likely from retail or algorithmic traders. Given the lack of bid activity in the data and the absence of a large institutional buy wall, the market appears to be under strong net outflow pressure, with little to no buyer interest emerging mid-day.

Peer Comparison

While ELPW.O dropped sharply, related stocks in the energy, tech, and broader equity markets showed mixed behavior:

• BEEM (-0.4%) and AREB (-2.68%) both declined
• ATXG (+1.21%) and AACG (+3.35%) bucked the trend
• Larger names like AAP (+0.58%) and AXL (-0.89%) saw moderate moves

This mixed performance indicates no clear sector rotation to explain ELPW.O’s move. The sell-off appears more idiosyncratic—driven by internal factors or a liquidity event rather than a broader market shift.

Hypothesis Formation

Two likely scenarios emerge from this data:

1. Short Squeeze Gone Wrong: A sudden reversal of sentiment led short sellers to cover, causing a panic unwind. The RSI hitting oversold territory suggests this may have reached a short-term bottom.
2. Liquidity Shock from Heavy Shorting or Options Activity: The massive volume and lack of bid activity point to possible algorithmic selling or a large options-related event, such as a short-dated put expiry or a forced liquidation.

With no block trading data to confirm the latter, the first hypothesis seems more probable.

Looking Ahead

Traders and investors should watch for a potential rebound off the RSI oversold level and whether volume moderates on a follow-up session. A continuation of this selloff could indicate a deeper structural issue with the stock, while a bounce might suggest the move was a one-off liquidity event.