Correction imminent in SGOCO Group Ltd. (NASDAQ:SGOC)?


Shares of SGOCO Group, Ltd. (NASDAQ:SGOC) are currently poised at 12.90% from the open today and are trading at $1.75. More than 1,366,268 shares have exchanged hands compared to an average trading volume of 10.16K. At the current pps, the market cap stands at $18.78M. The stock prices of SGOCO Group, Ltd. (NASDAQ:SGOC) are currently trading at -65.82% below its 52 week high and 16.67% above its 52 week low.

SGOCO Group, Ltd. (NASDAQ:SGOC) has been in the news for all the right reasons. Recently, SGOCO Group, Ltd. (NASDAQ:SGOC) announced that the acquisition of 100% of the issued share capital of Century Skyway Limited (“CSL”), a private holding company incorporated in Hong Kong, from its sole legal and beneficial owner – Full Linkage Limited (the “Vendor”).

As per Zack’s analyst ratings, SGOCO Group, Ltd. (NASDAQ:SGOC) currently has an average brokerage rating of . On a scale of 1 to 5, a rating of 1 or 2 would indicate a buy, and a rating of 4 or 5 would signify a sell recommendation. A rating of 3 would indicate a hold on the stock. The consensus target price on (NASDAQ:SGOC) is $ with a high of $ and a low of $.

Let’s take a look at the technical analysis.

The Barchart Technical Opinion rating is a 48% Sell with a Weakest short term outlook on maintaining the current direction. Longer term, the trend strength is Strong. Long term indicators fully support a continuation of the trend.

The Exponential Moving Average (EMA) is similar to a simple moving average (average price over a set period) but it utilizes a weighting factor that exponentially declines from the most recent data point (recent prices are weighted higher than oil prices). EMA analysis compares the short term (5 days and 13 days), intermediate term (20 days) and long term (50 days) EMA’s. The respective EMA’s will give bullish signals when trading above trailing EMA’s and below the current price and vice versa. EMA alerts include crossovers (i.e the 5 day EMA crosses above/below the 20 day EMA) and EMA convergencies (5 day EMA equivalent to 13 day EMA). The 5 day EMA 1.70 is higher than the last trade price suggesting a short term bearish pattern building up. Long term, the 50 day EMA 2.47 is also higher than the current trading price depicting a bearish trend overall.

The relative strength index (RSI) is a momentum oscillator that is able to measure the velocity and magnitude of stock price changes. Momentum is calculated as the ratio of positive price changes to negative price changes. The RSI analysis compares the current RSI against neutral(50), oversold (30) and overbought (70) conditions. Alerts will inform you when stocks recede from oversold/overbought levels or breakthrough neutral (50). The current RSI is 25.71 suggesting a bearish price action.

As such, while we believe SGOCO Group, Ltd. (NASDAQ:SGOC) represents a compelling growth story exposed to several secularly attractive markets, it would be interesting to see how it fairs for long-term investors.

SGOCO Group, Ltd. is focused on product design, brand development and distribution in the display market, including computer monitors, All-In-One and Parts-In-One computers and application specific products. SGOCO sells its products and services primarily in the China market and abroad. SGOCO Group Ltd., formerly known as SGOCO Technology, Ltd., is based in Causeway Bay, Hong Kong.

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