MicroAlgo Inc. (MLGO) Plunges 20.00% Amid Bearish Sentiment

MicroAlgo Inc. (MLGO) shares plummeted 20.00% intraday, hitting their lowest level since February 2025, marking a three-day consecutive decline with a total drop of 42.65% over the past three days.

The strategy of buying MLGO shares after they reached a recent low and holding for 1 week yielded strong results over the past 5 years. The strategy's annualized return was 24.5%, significantly outperforming the SPY's annualized return of -2.9%. Additionally, the strategy's maximum drawdown of 10.8% was lower than the SPY's maximum drawdown of 11.4%, indicating better risk-adjusted returns. However, the strategy's Sharpe ratio of 2.3 was slightly lower than the SPY's Sharpe ratio of 2.4. Overall, the strategy demonstrated robust performance with acceptable risk, making it a viable option for investors looking for long-term gains.

MicroAlgo Inc. has been experiencing significant volatility, with its stock price moving 27.59% between high and low on the last trading day. The stock's daily average volatility over the last week was 38.03%, indicating a high-risk investment. Despite some positive signals like the 3-month Moving Average Convergence Divergence (MACD) buy signal, several negative signals are present, including sell signals from both short and long-term moving averages. A pivot top point on March 31, 2025, issued a sell signal indicating a further fall of 93.20% so far, suggesting further decline until a new bottom pivot is established.

MicroAlgo Inc. is oversold on the RSI14 (12), which might present a rebound opportunity but also indicates potential continued decline. The stock finds support just below its current level at $1.28, but with no accumulated volume support below today's level, the risk of a significant drop is increased. The short interest ratio is high, indicating some investor pessimism about the stock.

MicroAlgo announced a quantum entanglement-based novel training algorithm, which could impact machine learning and AI training processes, potentially influencing investor sentiment. However, the overall market sentiment remains bearish, with several negative signals and trends suggesting MicroAlgo Inc. may continue to perform weakly in the short term despite some positive technological developments.