it's a 2.3 million person subreddit dedicated to memes and YOLO Tesla calls that relishes in the massive swings that come with risky trades
aka heaven for the hyperactive amateur trader
1/ If you've felt like stock market has been disconnected from reality for the past few days, you're not alone
this is the story of the magic bubble created by amatuer traders that broke a multibillion dollar hedge fund
it's a 2.3 million person subreddit dedicated to memes and YOLO Tesla calls that relishes in the massive swings that come with risky trades
aka heaven for the hyperactive amateur trader
it's a mall-based retailer that is saddled with debt ($450 million as of Q4 2020) and falling sales (down 40% in last 2 years)
essentially, it's the Blockbuster of video games waiting to be eaten by a Netflix
the pros on Wall Street saw a failing business and took positions where they would profit if the stock falls
in fact, it's the single most shorted stock in the entire Stock and S&P 500
Melvin also held large short positions against National Beverage, iRobot, and Bed Bath & Beyond
big mistake
GameStop: +64%
iRobot: +42%
Nat. Beverage: +26%
Bed, Bath & Beyond: +19%
Melvin got absolutely obliterated
r/WallStreetBets
they had seen Melvin's shorts and mobilized en masse to blow them up
and yes, it's possible for the little guy to take on a multi-billion dollar hedge fund right now
as traders piled into GameStop, Melvin was forced to buy shares to cut some of its losses...which only drove the price higher
and remember, GameStop is a failing business
this was just r/WallStreetBets flexing on "the establishment"
after averaging a 30% yearly return since it was founded in 2014, its DOWN 30% to start the year
it had to take in $2.75 billion in outside funding to stay afloat
earlier today, billionaire investor @chamath bought $115 call options meaning he thinks the stock will keep on rising
despite his slightly tongue and cheek bullishness, the stock is skyrocketing once more today
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One of the most successful stock trader with special focus on cash stocks and who has a very creative mind to look out for opportunities in dark times
Covering one of the most unique set ups: Extended moves & Reversal plays
Time for a 🧵 to learn the above from @iManasArora
What qualifies for an extended move?
30-40% move in just 5-6 days is one example of extended move
How Manas used this info to book
Post that the plight of the
Example 2: Booking profits when the stock is extended from 10WMA
10WMA =
Another hack to identify extended move in a stock:
Too many green days!
Read
Covering one of the most unique set ups: Extended moves & Reversal plays
Time for a 🧵 to learn the above from @iManasArora
What qualifies for an extended move?
30-40% move in just 5-6 days is one example of extended move
How Manas used this info to book
The stock exploded & went up as much as 63% from my price.
— Manas Arora (@iManasArora) June 22, 2020
Closed my position entirely today!#BroTip pic.twitter.com/CRbQh3kvMM
Post that the plight of the
What an extended (away from averages) move looks like!!
— Manas Arora (@iManasArora) June 24, 2020
If you don't learn to sell into strength, be ready to give away the majority of your gains.#GLENMARK pic.twitter.com/5DsRTUaGO2
Example 2: Booking profits when the stock is extended from 10WMA
10WMA =
#HIKAL
— Manas Arora (@iManasArora) July 2, 2021
Closed remaining at 560
Reason: It is 40+% from 10wma. Super extended
Total revenue: 11R * 0.25 (size) = 2.75% on portfolio
Trade closed pic.twitter.com/YDDvhz8swT
Another hack to identify extended move in a stock:
Too many green days!
Read
When you see 15 green weeks in a row, that's the end of the move. *Extended*
— Manas Arora (@iManasArora) August 26, 2019
Simple price action analysis.#Seamecltd https://t.co/gR9xzgeb9K
