ZJYL Plummets 19.9% on Short-Squeeze Fears and Restructuring Uncertainty

Summary
• ZJYL’s share price collapsed 19.89% intraday, hitting a 52-week low of $0.1619
• Short interest ratio dropped 63.6% in December, signaling fragile bullish sentiment
• Company announced a share capital restructuring and new equity plan ahead of January 30 EGM
• Technicals show bearish divergence with RSI at 59.46 and MACD histogram surging to 0.0055

Jin Medical International (ZJYL) is in freefall as investors flee amid a perfect storm of short-covering pressure and corporate governance uncertainty. The stock’s 19.89% intraday plunge—its worst single-day drop since the March 2023 IPO—has exposed deep cracks in its fundamentals. With the stock trading at 79.8% below its 52-week high of $1.025, the market is pricing in severe operational risks from its upcoming capital restructuring and a deteriorating short-interest environment.

Restructuring Uncertainty Sparks Flight to Safety
ZJYL’s catastrophic selloff stems from a combination of corporate governance risks and technical breakdowns. The company’s announcement of a share capital restructuring and new equity plan—set for a January 30 shareholder meeting—has triggered panic among retail and institutional investors. Short-sellers, emboldened by a 63.6% decline in short interest in December, are aggressively covering positions as the stock approaches its 52-week low. Meanwhile, the stock’s technical profile has turned decisively bearish: a bearish engulfing candlestick pattern on the daily chart, coupled with a MACD crossover below the signal line, confirms the breakdown of key support levels. The 200-day moving average at $0.5515 is now a distant memory, with the stock trading at 69.7% of its 200-day average.

Medical Sector Mixed as MDT Holds Steady
While ZJYL’s collapse is extreme, the broader medical sector remains resilient. Medtronic (MDT), the sector’s bellwether, rose 0.31% intraday, highlighting the divergence between ZJYL’s governance risks and the sector’s stability. ZJYL’s 19.89% drop dwarfs the sector’s average 1.2% volatility, underscoring its unique exposure to capital structure concerns and short-interest dynamics.

Bearish Playbook: ETFs and Technicals in Focus
• 200-day MA: $0.5515 (far below current price)
• RSI: 59.46 (oversold territory)
• MACD: 0.00068 (bearish crossover)
• Bollinger Bands: Price at 0.1929 (near lower band at 0.1859)

ZJYL’s technicals scream for a bearish trade. The stock is trading at 79.8% below its 52-week high and 69.7% below its 200-day MA, with RSI in oversold territory. Key support levels to watch: the 30-day MA at $0.2267 and the 200-day MA at $0.5515. A breakdown below $0.1619 (52-week low) would trigger a 30%+ decline from current levels. Given the absence of options liquidity, ETFs like XLV (Health Care Select Sector SPDR) could offer indirect exposure to sector trends. Aggressive short-sellers should target a $0.15 entry with a $0.18 stop-loss.

Backtest Jin Medical Stock Performance
The backtest of ZJYL's performance after a -20% intraday plunge from 2022 to the present reveals positive short-to-medium-term gains. The 3-Day win rate is 42.45%, the 10-Day win rate is 42.17%, and the 30-Day win rate is 42.74%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 4.97%, which occurred on day 39, suggesting that the stock has the potential for recovery and even surpassing its pre-plunge levels.

ZJYL’s Freefall: Time to Exit or Rebalance?
ZJYL’s 19.89% intraday drop has created a high-risk environment for longs and a golden opportunity for shorts. With the stock trading at 79.8% below its 52-week high and short-interest dynamics shifting, the immediate outlook remains bearish. Investors should prioritize exiting long positions or hedging with cash-secured puts. Medtronic’s 0.31% gain highlights the sector’s relative stability, but ZJYL’s governance risks make it an outlier. Watch for a breakdown below $0.1619 to confirm the bear case—this could trigger a 30%+ decline from current levels. For now, the message is clear: ZJYL is in freefall, and the floor is still falling.