KOSS Corporation Stock Forecast: KOSS plays catch up as AMC dominates, targets $60 resistance

KOSS shares rally in a meme day to remember.
KOSS stalls at previous high from March 10.
The headphone maker from Wisconsin now has a price/ earnings ratio of 842!

Ivan Brian FXStreet

KOSS shares roared back into the limelight on Wednesday as the meme stocks returned to levels not seen since January for many. Or in the case of AMC levels not seen ever. The move appears to have a number of causative factors, most notably the demise of Bitcoin, leading to a flow of retail money back into meme stocks. AMC kick-started this move leaving its so-called big brother GameStop (GME) in the dust.

The decision by Mudrick Capital to buy and sell within the day appears to have roused the beast so to speak as AMC postings on social media went into overdrive. While Gamestop lagged somewhat and gained a modest 13% on the day, KOSS soared to a 68% gain, closing at $40.72. This may seem exorbitant but it is actually still quite a long way from the January frenzy high of $127.45.

KOSS is unique among the meme stocks in that it is very easy to move the share price. The stock has a tiny percentage of its shares available for trading, known as the free float percentage. KOSS only has 1.87 million free float shares out of a total of 8.52 outstanding shares. Over the last five days, KOSS has averaged over 9 million shares average daily volume and on Wednesday the stock traded over 19 million shares. Therefore, describing it as a frenzy seems to be an understatement.

KOSS stock forecast

Clearly forecasting something with this level of volatility is akin to throwing darts at a moving dartboard, but some technical levels have been identifiable since the moves back down from the January highs. Indeed FXStreet has identified some key levels which kickstarted the move.

From our May 25 article "What is most interesting about KOSS bottoming out is that the shares bottomed out at the previous low from March 25, at $15.85. Below, there is another strong support at $11.80. The first target for KOSS to achieve is $26.26. A breakout above this latter level will extend targets to $33.80 and $40.48".

Technical analysis works as can be seen from the chart below. From here, it gets harder as everything looks stretched. Obviously, the fundamentals are well stretched but now so are the momentum technical indicators such as the Relative Strength Index (RSI), Commodity Channel Index (CCI) and the Williams %R. The first target is a nice round $60, the open and high from February 1. Fibonacci retracement levels of the fall from the January high then come into play at $70.27, 50% retracement, and $83.76 the 61.8% retracement. Support is found from the breakout now far below at $26.26.

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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