DiDi Global Inc. (NYSE: DIDI) shares plummeted further after a Bloomberg report Thursday that China is weighing an unprecedented penalty for DiDi after its IPO. The stock was trending throughout the day on social media sites such as StockTwits.

DiDi Global was down 21.28% at $8.02 at last check Friday. 

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DiDi Global Daily Chart Analysis

• Shares have been falling and possibly formed into what technical traders call a falling wedge pattern.
• The stock has no mid- or long-term moving averages as it was a recent IPO, making other levels of support and resistance more difficult to find.
• The Relative Strength Index (RSI) has been falling since the IPO and now borders the oversold area.

Key DiDi Global Levels To Watch

• The stock has been falling deeper into the falling wedge pattern as sellers have stepped into the stock.
• The stock may continue to trade within the pattern further until it can break above pattern support or resistance and see a further push likely in the same direction.
• The Relative Strength Index (RSI) has been falling since the stock had its IPO and now sits at 30 on the border of the oversold area. This means there are many more sellers in the stock than there are buyers.

What’s Next For DiDi Global?

Bullish traders would like to see the stock start to move higher and eventually break above the pattern resistance. This could cause the stock to see a further push higher and a potential change in trend.

Bearish traders would like to see the stock fall and break below the pattern support. This could mean the stock is not ready to see a reversal and could continue to trade lower. Bears want to see the RSI continue to fall.