Begin by looking at the chart for the entire history of the stock and reverse engineer.
- What caused the price-per-share (PPS) to spike in the past?
- Was is a news item?
- Was it an SEC filing?
- Did the “bag holders” buying into an upside over-reaction dump in a fashion characteristic of tax loss selling or harvesting?
- Did the PPS recover in January in a fashion characteristic of “the January effect?”
Narrow your focus to key event periods and closely examine the PPS and volume reaction.
This is what I do in THE CANNABIS REPORT. In the absence of evidence to the contrary, assume that what has occurred in the past will occur in the future. And, in almost all cases, avoid holding during a reverse split. The only exception is a reverse merger occurring before any indication of a reverse split.