UXIN Stock Soars, But Is It Time To Sell?

Shares of investment holding company Uxin Limited UXIN were up over 45% Wednesday, but it may be time to sell as the stock is extremely overbought.

Overbought refers to a stock’s momentum. This is a measurement of how far the price has moved in a given period. If it reaches an extreme to the upside, it's considered to be overbought.

On the following chart, the lower part is the Relative Strength Index momentum indicator. The last time it showed the conditions to be as overbought as they are now was on April 1. On that day, UXIN closed at $1.97. Within two weeks the price dropped to $1.25.

Of course, there is no guarantee that the price will go lower like the last time, but there is a good chance that it happens again.

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