MysteriousPersian
Short

Waifair (update)

NYSE:W   WAYFAIR INC
As initially thought, W went on to make a higher high and found strong resistance at the 200 region. Expecting some kind of consolidation here before either heading higher or lower. Consider the balance and income sheets and the overall economic conditions, the bias is obviously down but that does not mean it cant squeeze higher either. With a shgoirt float still hovering around 30%, the potential for higher highs is still there
Comment:
Comment: Pumping up to the 200 region, we see that consolidation of the potential top is in full effect. expecting a full stop at 200$ region in order to validate this theory.

Comments

@MysteriousPersian Been watching wayfair for awhile and got killed a few times shorting it. Seems like, IMHO the more people short it, the higher W climbs. Besides looking at the short float percentage, what indicators will you look for to know what direction it will go? Obviously that's a loaded question but I'm very curious what specifically you'll look for on Monday and Tuesday. I can't imagine many retail investors are buying shares right now but many are scared to short it. It's also a VERY manipulated stock by some big cats using algorithms. Love to hear your thoughts. thanks.
+1 Reply
@BinSF, in general derivatives just exacerbate market volatility. So the more people short, the higher potential for a squeeze that is true. However, you have to keep in mind that short covering is ARTIFICIAL buying. that means that eventually, the price reverts back to value. The true value, however, doesn't change, so the higher the spike in price caused by the squeeze, the larger the eventual fall. For strong short squeezes like this keep an eye on short interest, Volume (when volume starts picking up into the sell tiers) and momentum are all very important to tell when a squeeze is over.

From what I'm seeing, I give a 70% chance that a top has been reached after we consolidate between 150-200 for a few weeks
+1 Reply
BinSF MysteriousPersian
@MysteriousPersian, thanks! Another thing I'm noticing is lately W often runs inverse to SPX/DOW. Same with a lot of other bubble tech stocks like ZM, SNAP, SHOP. Keep in touch, I like the way you think.
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@BinSF, NDX overlayed with W. THere are actually very closely correlated (without taking into account intraday price fluctuations) that's how I see it anyways
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BinSF MysteriousPersian
@MysteriousPersian, thanks, this is good insight. Well, we broke $155 today so feeling better about these puts. Hopefully keep that short percentage from getting too high.
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M48 MysteriousPersian
@MysteriousPersian, How high can a short squeeze take a stock? Like, are there any limits?
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Thank you !!
+1 Reply
Love your idea. I had a put for 175 last Monday and hit it with flying colors, dropping 20 points!!! They are due for another drop for sure
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