WeTrade share price had a short squeeze: avoid this penny stock

WeTrade (OTCMKTS: WETG) stock price made a strong recovery on Wednesday after the Chinese company launched a new product to take advantage of the artificial intelligence wave. The shares soared by more than 70%, its best day since the company went public a few years ago. This rally brought its total market cap to over $15 million.

Why did WETG soar?

Small cap Chinese companies have become popular among day traders in the past few months. I recently wrote about Chijet, a mysterious electric vehicle company whose shares popped by double digits in a day. We also wrote about AMTD Idea, whose shares jumped by over 1,000% in 2022.

WeTrade has also become popular among day traders. It is a tiny Chinese company that provides software solutions to companies in all industries. The company operates in four key divisions, including YCloud, WTPay, Y-Health, and YG. 

As the name suggests, YCloud provides cloud computing services to marketing companies while WTPay is in the payment industry. Y-Health builds solutions to detect and prevent epidemics. YG provides digital new energy solutions. As a Chinese company, little is known about WeTrade since the firm does not publish the extensive 10k statement.

WeTrade has been under pressure in the past few months as it came close to being delisted by Nasdaq. It survived by doing a reverse split. The most recent news is that the company sought to benefit from the boom of artificial intelligence.

In a statement, the company said that it was launching a large-scale language model that will help its clients solve key challenges. It can handle article tag excerpts, news content, and text error correction among others. Hechun Wei, the CEO said: 

“WeTrade has gradually shifted its business focus to overseas. In addition to the underlying product sectors such as AI intelligent products, the new energy business and cross-border financial business will become the focus of the group’s business.”

WeTrade stock price forecast

The chart above shows that WeTrade share price has been in a strong downward trend since peaking at $9,159 in 2022. It is a thinly-traded company, as evidenced by the lack of volume. The shares remained below all moving averages, signaling that bears are still in control.

Therefore, there is a likelihood that the stock will resume the downward trend as sellers target the next key support at $10. A drop below $10 will see it move to a split-adjusted low of $6.18.