- Pinduoduo stock jumps more than 18% at Monday open.
- Q2 earnings were much higher than the market had expected.
- Chinese consumption appears to be returning according to CEO.
Pinduoduo (PDD) stock is up over 18% to $68 at the start of the week's trading on Monday. Investors in the regular session are even more excited about the ecommerce retailer's second quarter results than the premarket crowd. Pinduoduo's major windfall, an astounding 157% YoY EPS gain, pushed it up more than 8% in the premarket shortly after the results were released.
Earnings per American depository share came in at $1.13, outpacing Wall Street's forecast of $0.41. Revenue of $4.69 billion in Q2 also ran ahead of forecasts, this time by $1.25 billion. Revenue advanced 36% YoY.
Management said the largescale earnings figure was related to postponing certain corporate investments and the recovery of Chinese consumption after the covid-related shutdowns of the spring.
“We saw a recovery in consumer sentiment in the second quarter, especially during the 618 shopping festival, a reflection of the resilience of overall consumption,” said CEO and Chairman Lei Chen.
News for the Chinese market has been positive of late. Last week the Chinese government also announced a series of stimulus measures to help the economy rebound in the face of setbacks in the real estate sector and due to a recent heat wave that has forced factories to close.
Another part of the enthusiasm is the Securities & Exchange Commission just announced a preliminary agreement between itself and Chinese regulators that would allow SEC regulators to see internal company audits. Until now these were not allowed to be shown to foreign governments, which had made the possibility of Chinese firms being delisted a major worry. Now more US investors are once again taking a shine to Chinese equities, and Pinduoduo was a popular choice before Beijing's tech crackdown led to share prices getting slammed.
Pinduoduo stock forecast
Maybe the rally was pre-ordained back on August 8. That is when the 50-day moving average crossed above the 200-day moving average. This is known as a Golden Cross pattern and typically forecasts a sustained rally.
Support now sits at the 50-day moving average near $55.31. Monday's spike places PDD stock above the June 27 range high of $68.71. Bulls need to push Pinduoduo stock above the $71.27 high from January 20. Otherwise that price level will become sticky resistance. After that bulls will pinpoint the gap down on November 26, 2021. To do so, they need to retouch $79.06, the low from the prior session.
PDD daily stock chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains near 1.0400 post-US PCE
The US Dollar’s inconclusive price action allows some recovery in EUR/USD, keeping the pair around the 1.0400 region following the release of PCE inflation data for the month of January.
Gold slumps to fresh multi-week lows below $2,840
Gold stays under bearish pressure and trades at its lowest level in three weeks below $2,840. The uncertainty surrounding the Trump administration's trade policy and month-end flows seem to be weighing on XAU/USD, which remains on track to snap an eight-week winning streak.
GBP/USD clings to gains just above 1.2600 after PCE data
GBP/USD remains positively oriented in the 1.2600 neighbourhood as the Greenback is navigating a vacillating range following the PCE inflation release.
The week ahead – US Payrolls, ECB rate meeting, ITV results – W/c 3rd March
Having seen the Federal Reserve keep rates on hold last month the US labour market continues to show remarkable resilience, despite seeing a slowdown in hiring in January, after a blow out December number.
Weekly focus – Tariff fears are back on the agenda
While the timing of the EU measures remains still uncertain, Trump surprised markets on Thursday by signalling that the 25% tariffs on Canada and Mexico will be enacted when the one-month delay runs out next Tuesday.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.