A week ago I wrote about Wayfair’s (W) big break on the Don’t Ignore This Chart blog. It had just passed the key resistance and the volume accelerated to the highest level ever! And EVER is a very long time! 22 million shares traded on Friday, January 20th as W gained 20.25% and short sellers suddenly found themselves in a box. Either BUY on Monday and end the pain, or risk massive, unlimited losses while the strength continues. The wise ended their pain. For others, it may be the worst migraine imaginable! I said it was going to be an interesting week and it was as W gained another 36% last week. The bad news for the short sellers is that I don’t think the pain will go away next week either. Here is the chart showing another final breakout at Friday’s close:
Last Monday’s volume set another record as 27.5 million shares changed hands. Many short sellers heeded the breakout and ended their misery after suffering a big loss. Others stubbornly refused to give in, and they will likely face much more pain in the coming week.
Did you miss this exciting opportunity at W on the long side? Well I think we have another stock that looks almost identical to Wayfair that just broke out on Friday at more than triple its normal volume. There is an increasing likelihood that we will see a blast higher next week. I’m featuring it in our FREE EB Digest newsletter on Monday morning. If you haven’t signed up yet, simply CLICK HERE and enter your name and email address. No credit card is required and you can unsubscribe at any time.
Happy trading!
Tom
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, a company that provides a research and education platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR) that provides guidance to EB.com members every day the exchange is open. Tom has brought technical expertise here at StockCharts.com since 2006 and also has a fundamental public accounting background which brings him unique skills to approach the US stock market.
