✂️WTRH – Reverse Split (1-20) ✂️

A reverse split is, generally, a negative situation.  It means that the company is probably struggling to be in compliance, or the company has been  watching their stock price drop and wants to reset in a sense, at a higher price, and try to start building value again.  When a stock goes through a reverse split, there are usually a lot of bearish catalysts that happen.  First, they will announce that they want to have a vote on a potential reverse split.  The PR about that vote usually pushes the stock price down.  Then they will announce the date and the ratio of the reverse split, and the PR from that usually also pushes the stock price down.  Then they go through the reverse split, which is also typically a bearish day for the stock price.

But, after the reverse split, the float shrinks by the same ratio as the reverse split.  And after the stock price has been hammered by all those negative events, any good news at all can trigger a whole lot of buying, and the low float can make that buying turn the stock into a geyser.  Keeping track of the 1 hour and 15-minute technicals (Williams, MACD, PPS, TTMScalper, TTMTrend, etc) is important when you want to try to capture the run after the reverse split.  And typically, this kind of event is one for the “Afterglow” traders, who wait for the event to pass, the dust to settle, and then they try to time the bottom when the market starts to try to correct their over-reaction to all the recent bad press.