DouYu Shares Face Mounting Pressure Ahead of Earnings

Investors are bracing for potential volatility as DouYu International Holdings prepares to release its third-quarter results this Wednesday. Technical indicators are flashing warning signs, pointing toward a sustained downward trajectory that has market participants increasingly concerned.

Wall Street Maintains Cautious Stance

Market sentiment remains decidedly cautious toward the gaming livestreaming platform. According to MarketBeat data, the consensus rating among analysts stands at “Reduce,” with an average price target of $7.00. Ownership distribution reveals that public companies hold the largest stake at 40%, while insiders and institutions control 17.30% and 17.86% respectively.

The company’s second-quarter performance had offered some positive developments, with DouYu achieving a notable turnaround by posting a net profit of 37.8 million RMB instead of an anticipated loss. During that period, the innovative business segment surged by an impressive 96.8%, though this growth was partially offset by a 26.9% contraction in the core livestreaming operations.

Technical Indicators Signal Persistent Weakness

Multiple technical metrics are currently painting a bearish picture for DouYu’s stock. The Aroon Indicator triggered a sell signal on November 11, suggesting further declines may be imminent. Earlier in November, the momentum indicator dropped below the zero line, representing a classic bearish signal that typically prompts selling pressure.

Should investors sell immediately? Or is it worth buying DouYu International Holdings?

Perhaps most concerning to technical analysts is the simultaneous sell signals emerging from both short-term and long-term moving averages. One analytical projection forecasts an anticipated decline of -17.23% over the coming three months, with a 90% probability that the stock will trade between $5.33 and $5.98 during this period.

Recent Trading Activity Reflects Growing Concerns

Thursday’s trading session provided concrete evidence of the mounting pressure, with shares declining 0.588% to close at $6.76. The day’s trading range showed considerable volatility, fluctuating between $6.70 and $6.99 amid elevated volume—a pattern that technical analysts interpret as a classic bearish divergence signal.

All Eyes on Wednesday’s Earnings Report

The upcoming Q3 earnings release on Wednesday now represents a critical juncture for the company. Analyst expectations are set for earnings per share of $0.0025 on revenue of $128.31 million. This report will likely determine the stock’s near-term direction and could either reinforce or contradict the prevailing technical outlook.

The central question facing investors is whether the robust growth in DouYu’s innovation segment can sufficiently counterbalance the ongoing challenges in its core livestreaming business. While Wednesday’s figures will provide the definitive answer, current technical signals appear to be anticipating a negative outcome.