I was going through my multitudinous short positions in order to dream up some good content for an otherwise quiet weekend, and I noticed quite a few of my positions were head and shoulders patterns. Some are more “textbook” quality than others, but I’ve augmented each chart to make the pattern more clear. Here’s the second set:
I look at about 1200 charts every single trading day, and a number of them are so trashed that they barely merit even a moment’s glance. One of these was Weight Watchers which, until today, was simply a trashed stock that had fallen from nearly the triple digits down to virtually penny-stock land.
That all changed today when Oprah “extra husky” Winfrey gobbled up a 10% stake in the company. That fat commitment caused the shares to tip the scales at more than twice where they closed Friday and left shorts blubbering. Oprah has already porked out on a $70 million paper profit, but I mention all this for a different reason: the gap.
Well, I’m probably going to go dark until after the close. Best of luck, everybody. Here are a couple of gap values to watch on two very interesting equity indexes.
I need to scoot right now, so I’ll do a longer post later, but I wanted to say I am watching the gap below on the MDY with great interest. The “big day” Thursday is going to answer a lot of questions (and jostle a lot of accounts), and whether the tumult “respects” this gap (or screeches right past it) will be very telling.