The AMGO share price has been in a strong bullish trend lately after the positive statement by the Financial Conduct Authority (FCA). The Amigo stock is trading at 6.57p, which is about 267% above the lowest level this year. This rebound brings its total market capitalization to about £31 million, making it a relatively small company.
Amigo was a leading sub-prime lender in the United Kingdom that offered all types of loans. A few years ago, the company came into the spotlight after it warned that it could go bankrupt. This is after it received a deluge of customer complaints that accused it of misselling loans. To avoid declaring bankruptcy, the firm said that it would raise about 97 million pounds by diluting its existing shareholders.
The AMGO share price has been in a bullish trend after the FCA gave it the green light to resume lending if it met the required conditions. However, its survival plan will also need to be approved by the London high court.In March 2021, Amigo reported that it had a revenue of 170 million pounds and a net loss of over 289 million pounds. In the previous year, the firm had a revenue of over 294 million pounds. While the statement by FCA is positive for the company, it faces an uphill battle to become a profitable firm in the future. It also has a lot of PR to do in a bid to improve its tarnished image.
AMGO share price forecast
The daily chart shows that the Amigo share price has made a spectacular rebound lately. It is trading at 6.57p, about 267% from its all-time high. It is still about 77% below its highest level in 2021. At the same time, the current price is along the lowest level in May last year. Nevertheless, it has moved slightly above the 25-day and 50-day moving averages.
Therefore, while the rebound has been strong, the overall outlook for the stock is lower, with the next key support level being at 3.5p. This view will be invalidated if the shares move above the key resistance at 9.83p.