MicroAlgo (MLGO) Shares Soar 4.01% After 26.36% Plunge

MicroAlgo (MLGO) shares surged by 4.01% today, marking a significant rebound after hitting a low not seen since December 2024, with an intraday decline of 11.11%.

The strategy of buying MLGO shares after they reached a recent low and holding for one week resulted in significant underperformance. Over the past five years, the strategy yielded a return of -98.77%, compared to a benchmark return of 56.81%. The excess return was -155.58%, and the CAGR was -83.55%, indicating a substantial loss. The strategy also had a high maximum drawdown of -99.77% and a Sharpe ratio of -0.27, reflecting significant risk and negative returns.

MicroAlgo's stock has been under significant pressure due to severe technical distress. On June 16, 2025, the stock experienced a sharp decline of 26.36%, closing at $0.63. Technical indicators such as the RSI14 at an oversold level of 17 and a deeply negative MACD confirmed the bearish sentiment. The stock's prolonged downtrend was evident as the 50-day and 200-day moving averages were significantly above the current price, indicating a sustained bearish trend. Elevated trading volume suggested capitulative selling pressure, further exacerbating the stock's decline.

Operational challenges have also contributed to the negative investor sentiment surrounding MicroAlgo. The company's struggles in this area have weighed heavily on its stock performance, leading to a decline in investor confidence. These operational difficulties have been a persistent issue, further complicating the company's efforts to stabilize its stock price.

Additionally, a high short interest ratio, with 2,482.41% of MicroAlgo's floating shares currently sold short, indicates widespread negative sentiment among investors. This high level of short interest suggests that many investors are betting against the stock, expecting further declines. The combination of technical distress, operational difficulties, and high short interest has created a challenging environment for MicroAlgo, contributing to its recent stock price decline.