So, you know how sometimes a stock goes up a lot really fast, and then everyone who bought it early decides it's a good time to cash in? That's basically what's happening with Luda Technology Group Ltd. (LUD) on Thursday. The stock is taking a step back, down over 6% in the premarket, after it shot up by more than 24% during Wednesday's session. It's the classic profit-taking move after a big pop.
The pop, of course, had a very good reason. On Wednesday, Luda announced that one of its subsidiaries scored a significant tender win. The award comes from Shangdong Yulong Petrochemical Co., Ltd., and it's for the Yulong Island Refining and Chemical Integration Project. Specifically, the framework agreement covers medium and low-pressure stainless steel flanges. In plain English: Luda, which makes stainless and carbon steel products at a factory in Taian City, China, just landed a nice, chunky contract in the petrochemical sector.
How chunky? The total contract value exceeds 160 million Chinese yuan, which works out to roughly $23.47 million. For a company that generates most of its revenue from its manufacturing segment in China, this is the kind of deal that management says will "enhance financial performance." It's a solid, tangible win.
Now, let's talk about where the stock sits on the chart, because the picture is a bit mixed. Luda is still trying to find its footing after falling quite a ways from its 52-week high of $24.20. Currently, it's trading 24% above its 20-day simple moving average (SMA) but remains 18.9% below its 100-day SMA. The moving-average setup isn't giving a clear all-clear signal yet either, as the 20-day SMA is still sitting below the 50-day SMA. For context, despite the recent volatility, the stock is up nearly 48% over the last 12 months. Traders are watching key technical levels, with resistance around $5.50 and support near $4.50.
As of Thursday's premarket action, Luda Technology shares were down 6.21% at $5.44, according to market data. After a sprint like Wednesday's, a little cooldown lap isn't the most surprising thing in the world.
