Ask Yourself These Questions

GameStop has taken the world by storm dominating the headlines as the "Reddit Army" or Wall Street Bets (WSB) group has triggered a massive short-squeeze on some heavily shorted stocks.

Retail traders large and small have taken their money and put it down on these trending tickers including Blackberry (BB), Bed Bath and Beyond (BBBY), GameStop (GME), and AMC Entertainment Holdings (AMC) in hopes of buying high and selling higher. It's truly a phenomenon that's never been seen before. Retail vs. Wall Street/Institutions.

However, what I have seen many times before is a stock or group of stocks that catch fire with the retail crowd and get pushed higher than anyone thought possible. But, it always ends the same. The stock comes crashing back down leaving those with the greatest amount of FOMO holding the bag.

I've been asked countless times over the last few days if it's a good time to get involved in these stocks? My answer is a series of questions: Can you manage your risk in a stock that is gapping higher or lower by 50% to 100% a day and has a daily range of $300 or more? (GME's high to low range on Thursday was $483 to $112). When do you get in? Where do you get out for a profit or a loss? If you can't answer these questions then you should probably just sit back and enjoy the show.

There were other less followed stocks that were "squeezing" last week that offered up incredible opportunities and had a far better reward to risk than the headline stocks above. These stocks had large short floats but they were trading at prices and levels where you could effectively manage your risk. 

Having a plan and managing risk is what differentiates the gamblers from profitable traders.

Finding The Next GameStop

I'm not sure If the "short squeeze" story is over and if the WSB gang is finished targeting some of the highly shorted stocks. But l will be watching these stocks closely next week for potential trading opportunities.

This is not investment advice and these stocks are trading vehicles only, if and when they set up and offer favorable reward to risk entry points.  

FUBO - 75% short float
OTRK - 43% short float
XL - 72% short float
SPWR - 57% short float
GOGO - 44% short float
WB - 66% short float
IRBT - 48% short float

What I'll be Watching This Week 👀 - SILVER

Guess what's trending on Twitter right now?

I don't know how this will play out but I've been bullish silver for a long time. Despite the trending headlines silver has been in a bull market since breaking above $20 back in July of 2020. 

A move above $29/$30 could be the start of a bigger move that challenges the old highs near $50.

Myself and premium members have been long SLV/HUZ.TO for a few weeks along with call options on SLV that are already up over 50%. 

Despite what the headlines read and the new narrative for owning silver, we will continue to let the price action speak for itself and honor our plan that was established before entering.

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