Urban One Stock Skyrockets But Becomes Extremely Overbought

Shares of Urban One, Inc. UONE were up almost 60% on Thursday, but shareholders need to exercise caution. Shares are extremely overbought.

"The media conglomerate, whose mission 'is to be the most trusted source in the African-American community,' has gained the support of officials in the Virginia capital city of Richmond. Six casino bids were submitted for Richmond’s sole gaming privileges, and this week, the city made Urban One the official winner," according to Casino.org.

Overbought refers to momentum. It means shares have reached an extreme level above what would be their normal trading range.

The bottom half of the below chart is the Relative Strength Momentum Indicator. The last time shares were as overbought as they are now was in January 2020. A big sell-off followed then, and there’s a chance it happens again.