Meme stonks, just a pullback or are they done? AMC GME SPCE PLXP VERB NFLX

A few weeks ago I was at my daughter's softball game when an old acquaintance from a previous job approached me and asked me if I "was still in stocks?" I hadn't seen him in years. I just reminded him to lock in gains on AMC after he proceeded to tell me about his newfound Wall Street Bets 'Apes' as it wouldn't be that high forever. That was a peak contrarian sell indicator for me. The stock is down 40+% since then. I hope he sold. I hope it was life-changing money, but at the end of the day, it reminds me that supply and demand price action is primary and everything else is just noise designed to feed on your emotions. Stay calm, focus on price action, and trade on.

It's only one ticker, there are thousands. Make money or cut your loss and next. No coulda woulda shoulda held crap. That's how you end up turning your trade into an investment and keep/find your day job. Nothing wrong with having a great career in tech, teaching, tax filing or whatever you love to do while investing in a 401k/Roth each paycheck in a stable dividend-paying diversified fund like SPY, etc; but traders trade. Teachers teach. One must learn the tools needed to be successful regardless of the career choice. Thus learn to trade plan accordingly and then stick to your plan. Such as learning to code complex algorithms, having a teacher's plan for that day, or using the correct tax forms for a client.

If you actually want to learn to trade while not gambling on crowded trades just to sound cool to your buddies then read on. Yeah, I'm blunt when I get bone-headed questions about a stock that is up 800%+ on the year and they ask it if will go back up because they bought it near the highs. Did you have a trade plan or were you just gambling? If you were gambling, then don't ask a professional trader if you should buy, hold or sell. They are 100 levels ahead of you and have their own trade plans. Don't get offended when they don't give you the answer you want to hear. Be willing to go back and learn basic trading concepts and strategies.

I don't care how popular a stock is on Wall Street Bets. I don't care if Cramer mentioned it. In fact, both of these tend to be contrarian. Take DIDI for example. Cramer says load up the day before IPO and then claims he always says to avoid China names the day it crashed only 3 trading days after the IPO. Cramer is entertainment. WallStreetBets is a nice place to find tickers but that doesn't mean they are all buys or sells. This is where learning how to study price action comes in so you know when to get in and out. Enough rant, let's go.

So what's up with AMC, GME & SPCE? Full disclosure to start with. I do not have positions currently in any of these three. I avoided SPCE when it failed to follow-through over the bull flag setup from the idea Monday. Although, I think the snap-back bounce post-raise could be big when it comes. No rush to try to find the bottom though, let it prove reversal first while still using the lows it creates as your risk guide.

AMC and GME are both rolling over in a bearish tone for now. Like SPCE though, they could have decent bounces soon. Again, waiting for confirmation before buying, not just to buy. It will be a short-term bounce play. Long-term thought is that as usual, stocks that make large moves need time to digest and work out bored/weak investors. Traders take advantage of this. GME had some bad news after close Wednesday in that Netflix is going to venture into games. I'm not interested in trading it in its current condition. Although we had a nice trade on it back at the beginning of June, it's a waiting game now.

Before you bash me by saying you're just a bear or whatever emotionally charged words you want to call me for indeed pointing out the obvious bear trend, remember I told you what key levels to watch for a breakout in Mid-May prior to the monster move. It took a few extra days, but the best breakouts usually do. Not my fault you waited to buy until 60 and are really just mad at yourself. So now we wait for a new bullish setup or find a different ticker to trade.

Thus my watchlist for Thursday and Friday:

NFLX - I'm long calls here as it attempts a weekly chart breakout over 560ish area. Positive news out after close regarding the move into games. Could be a sell-the-news event though if it gaps too high. I'll lock in gains and look to add back later if it turns out that way. Not a chase the gap. Let it tell you which way it wants to go. If you do get long use the low of day as risk guide.

SNOW - I'm long some calls here. Made money on it Friday and gave some back today. Will look to add more if it starts to bounce off the 250, otherwise, I'll probably turn it into a strangle to recoup some if falls back to 230.

EL - No position yet, but looking at Oct $370 calls for a swing trade using 320 as risk guide. Finally clearing resistance after the increasing demand over the past 6 months in this bullish ascending triangle pattern.

BILL - no position yet. Watching for a continuation breakout over 195. May be early here. Ideally, it digests a few more days/weeks before a bigger breakout into 240-260 range. Patience on the entry will yield better results if/when it goes. Just be familiar with the chart.

VERB - okay cheapie lovers, this one definitely has my attention based on volume. Long-term it keeps getting stuck at 3 though. If it clears that level soon it could fly. Check this weekly chart. Really just looking for day-trades on it though. I don't know enough about the company to stay long overnight.

PLXP - watching for follow-through over 17.75 or a day-trade or a pull-back towards 13/14 range to get into a swing trade on some August Calls for the Walmart intro.

A few others worth watching for day-trade setups if you know what you're looking for: SGOC GLBE DTSS USEG CTIB - they can move fast both ways. Know the risk and build a plan before trying to trade any high flyer!

Happy Trading!

80 views0 comments