17 Education & Technology Group Inc

17 Education & Technology Group Inc (NASDAQ: YQ) is a holding company mainly providing education technology services with an in-school and after-school integrated model. Its smart in-school classroom solution delivers data-driven teaching, learning and assessment products to teachers, students and parents across many kindergartens through twelfth grade (K-12) schools.

Key Highlights

• Hovering in a Long-term Bearish Zone: YQ shares have lost ~95% in the one year and tilted towards its all-time low. Moreover, YQ shares are trading well below its crucial long-term support level of 200-day SMA, implies a long-term bearishness in the stock.
• Stock sustaining above short-term 50-day SMA: On daily price chart, YQ shares moved above its crucial short-term 50-day SMA resistance and sustaining above it since February 11, 2022. This indicates stock is taking support near its 50-day SMAs. However, unless stock register a deceive move from its 50-day SMA, an upside would be largely capped.
• Consistently loss-making business: Since YQ listing, the company has never reported positive bottom-line numbers. Moreover, company is loss making at operating level as well, implies that company is not generating much to at least cover its operating liabilities. Hence, fundamentally company is quite laggard.

Stock recommendation

YQ shares are in steep long-term bearish zone as stock is down ~95% in the last one year. Further, fundamentally company is bad bet as company is not generating enough to cover at least its operating expenses.  However, on daily price chart, YQ shares are sustain above its 50-day SMA since February 11, 2022 despite weakness in the broader market in the wake of Russia – Ukraine standoff, this implies a relative strength in the stock over the last month against the broader market. Hence, we recommend a “Watch:” recommendation at the current price of USD 2.38 (as on March 11, 2022, at 02:25 PM ET).

Technical Price Chart (as on March 11, 2022, at 02:25 PM ET). Source: REFINITIV, Analysis by Kalkine Group

Technical Summary

Note: Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.