Quick Take Technical Analysis: AEye, Inc

AEye, Inc LIDR gapped up over 20% higher on Tuesday and ran another 70.82% higher before slamming into a resistance level at $9.19 and retracing about 35%.

• The stock can be volatile due to its super-small float of just 5 million shares. By noon on Tuesday over 57 million shares of AEye had exchanged hands, which indicates the entire float had been traded more than 11 times over. The number seems unbelievable, especially considering 66.48% of AEye’s stock is locked up by insiders and institutions.
• ‘Too much, too soon” almost always causes a substantial pull back to occur. Lower timeframes can be more important to watch for patterns to develop on highly volatile stocks.
• Traders may want to watch for an inside bar to develop on the daily chart to take a position if not already in the trade from AEye’s lows. An inside bar is a bullish pattern when a stock was trading higher before the pattern was formed.
• The long upper wick on the daily candle indicates consolidation is needed before a potential move higher. If AEye falls below Tuesday’s low-of-day the bull run is likely over and a gap fill is likely to occur.

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