October 2, 2018

Looks Like Another Bubble Is In the Works

Shares of India Globalization Capital Inc. (IGC) rose sharply in overnight trading and into the early part of today’s session. The stock appears to be moving due to market-wide excitement over CBD-infused beverages, an area that IGC participates in. However, some analysts feel that the stock’s meteoric rise after nearly 10 years of declining value is based much more on hype than sound fundamentals. One prominent short-seller, Citron Research, has declared the stock’s value as nothing short of a scam, stating that the stock “should have a skull and crossbones” for its symbol. The comments seemed to resonate with the market, and shares retreated to as low as $9.50 after peaking at $14.58.

Ultimately, this does look like just another bubble, and it is one that appears to be getting close to the top. However, I doubt the enthusiasm has died off yet. After all, Citron is often wrong. Nevertheless, anyone looking to ride the wave on this stock must tolerate extreme volatility. While we were able to identify a great entry signal for this stock recently, it has become much more difficult to do so now. We’ll keep an eye on it either way.

about the author:

Mike Patton

Mike Patton took the leap into the markets beginning as a commodities broker in 2005, where he was responsible for identifying trading opportunities and executing trades on behalf of clients. After years as a broker he made the jump to education by joining the team at Trading Advantage, now Prosper Trading Academy.

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