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.
See the red horizontal line? That’s a gap I never thought would be filled. The gravitational pull of Oprah’s commitment, however, might just do the trick, and who knows – – I might even want to short some at that level.