Shares of Pinduoduo Inc. ( PDD) , a Shanghai-based platform that connects farmers with consumers directly through its interactive social commerce shopping experience, gapped higher Monday on an earnings beat and optimism on potential relaxation of Covid restrictions in China. 
In our October 24 review of PDD we wrote that "PDD is likely to retest some chart support in the $30 area but the speed of Monday's decline suggests that we could see a deeper decline in the weeks ahead. Avoid the long side of PDD."
Despite our call for lower prices we saw that prices quickly reversed to the upside and then Monday made a new 52-week high. Let's check the charts again.
In this daily bar chart of PDD, below, we can be positive on things if we just put a thumb over the October decline (editorial license). PDD is trading above the rising 200-day moving average line and above the flat 50-day line. The trading volume Monday is only "okay" and not particularly strong.
The daily On-Balance-Volume (OBV) line is pointed up telling us a bullish story. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but the two moving averages that make up this indicator are very close together.
In this weekly Japanese candlestick chart of PDD, below, we can see a positive-looking picture. Prices (not plotted) are above the 2022 highs. Trading volume is not at "lift off" levels and the weekly OBV line is not (yet) confirming the new price high. The MACD oscillator is slightly above the zero line.
In this daily Point and Figure chart of PDD, below, we can see today's rally without a price gap. Technically this move is an upside breakout with a higher price target but I hesitate to join the fray.
In this weekly Point and Figure chart of PDD, below, we can see a still higher price target of $138.
Bottom line strategy: Sometimes an upside price gap can become an island reversal or an exhaustion gap instead of a new leg higher. I am in no rush to be a buyer of PDD.
