The Chinese education technology space has suffered significantly in recent times and last week it was the New Oriental Education & Tech Group (NYSE:EDU) stock which suffered from a selloff.
Trading Data
On Friday, EDU stock fell 7.65% to $1.57 with 28.48 million share, compared to its average volume of 32.50 million shares. The stock has moved within a range of $1.5600 – 1.6800 after opening trade at $1.6750.
Major Trigger
On Friday, the stock continued to tank and went down by 8% and that took the cumulative losses made over the course of the past week to as much as 14%. While it is true that there was no news about the company last week, it should be noted that earlier on in the month on January 10 there had been a significant development that might have led to the pessimism among investors.
The company announced that it had fired as many as 60000 employees and it goes without saying that such an announcement can lead to deep pessimism about the stock. The education technology had been struggling ever since the Chinese authorities had opened a crackdown.
The layoff by New Oriental Education is the biggest round of firing from any company since the state crackdown had begun. At this point in time, it may be a good idea for investors to keep an eye on developments in the Chinese online education sector and then decide on a course of action.
Technical Data
EDU stock is trading below the 20-Day and 50-Day Moving averages of $1.85 and $2.04 respectively. Moreover, the stock is trading below the 200-Day moving average of $5.29.
