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Update on LK – Squeeze to 30s

Dear Gio,

I noticed you’re a little hyped over this stock pick. Remember the rule: you will always regress to mean. Its just another day at the office, so while you have a nice win here, somewhere down the road you will face an equal loser. What will you do then that would be different from now? Perhaps, you wouldn’t share it to the world, since its easier to publish our wins. Will an aversion to loss cause you to hold on? Will you abide by your trading principles to cut losses and admit defeat? Well, that’s something to keep in mind. But going into this trade you must realize the possibility that the herd will take profits and leave you behind. Are you willing to admit a mistake there? Or will your bias rationalize your trade and cause you to hold on to the trade thinking you’re in control, when only chance or luck will make either humble you or make you look like a genius, the latter being even more dangerous as it would embolden you to make a patter of bad trades.

So while the trend is in your favor, remember you are not playing the market, but the players. The market is unbeatable, and it should stay that way. If everyone could beat the market, then there would be no game. Respect the market, and continue to short the greed, buy the panic, kick those who are down, and pull on the capes of stock traders blinded by their so-called superhero power analysis.

From the heart of a contrarian…

Sincerely,
Gio


Its time to put fundamentals aside, and just attack LK from short term technical perspective. Stock is heavily shorted, and its high r/r for bears. Take advantage of those chasing the top, ride this to the 30s. Expect dips, which should make good entry points. For example, a morning pop to 29.80 showed high rate of exchange of covering, buying, and profit-taking. These uncertain and panicky exchanges usually mean the stock will continue in its short-term trend.

Adding to longs here.

Looks like I’m not the only one in on this trade.

Bullish on Luckin (LK) Aggressive Growth

LK seeks to overtake Starbucks by 2020, and a lot of traders are betting against it. What we need is more negative news, and some bad reviews ghost-written by bears to bring in more shorts. This stock just attracts so much rookies I had to take a long position pre-earnings. Looking to add this on a confirmed rally about 24/25 area.

Time to Go to Work! Slack On the Buy List

I’ve been waiting for slack to hit $17, but with its base forming here right at the low 20s, it has jumped way up on my to-buy list. You can show further patience and buy under 20, but when it comes to timing capitulation, its usually better to just make an entry and average in instead of timing the bottom. If the company is healthy, like Slack, has a great product, like Slack, and is under the radar by giants, as Slack is with Microsoft, then investing in it for the longer term is smart.

My stop-loss plan is to mirror something that of PDD chart. I’m anchoring the trade according to PDD 1-year chart… if this isn’t the bottom, I’ll buy more aggressively in 16-18 levels.

PRICE CHART OF Pinduoduo Inc (PDD)

Cut Losers Today – CRON / VFF. Exit ZM. Added to ETSY YETI shorts

I refuse to hold CRON into their earnings. Small upside (shorts covering) versus big downside to $6. I think it drops, and trickles down, offering a new swing trade entry.

Covered all ZM shorts, shorted 10 points ago around 78. This is one heavily shorted stock, and its due for a rally.

ETSY looks weak all over. And YETI is set up for a bull trap. Added to short position on both. ETSY is for a trend down, YETI looks like its beginning a nice long term trend down. Fancy water bottles belong in Ross, and these extreme coolers- just don’t see the growth here. There’s growth, but nothing to get this excited over. YETI to teens.