The meme volatility is alive and well!
Keith Gill is a busy bee in 2024.
Since he resurfaced in May, he pumped and unloaded his GameStop Corporation (NYSE: GME) shares. Now there’s a new stock in his sites.
The price spiked $10 after Gill posted a cryptic message to his RoaringKitty account on X.
And according to an SEC filing dated June 24, Gill holds roughly $300 million worth of this stock … After the SEC, the price spiked $8.
I traded the stock for a small profit.
But this is just the beginning for Gill’s newest pump and dump. And there’s still time to find a profitable setup!
This is everything you need to know about the market’s newest GME:
Chewy Inc. (NYSE: CHWY)
First of all … When it comes to these meme stocks, the fundamentals don’t matter. We’re playing hype and volatility.
With that said, from a degenerate trader’s perspective, a massive gamble on CHWY could be more attractive than a position on GME.
For the simple fact that CHWY is a profitable e-commerce pet-goods supplier. And GME is a flailing brick-and-mortar used video-game retailer …
See the image below describing CHWY’s earnings from June 1 this year:
The chart was already in an uptrend for the month of June due to a rosy earnings outlook.
But the real momentum came when Gill posted a photo of a cartoon dog on his social media.
See the post below from June 27:
All of my students had an opportunity to trade this spike, we got an alert from Breaking News right when Gill posted!!!
See the trade alert overlaid on the chart below:
Get the next Breaking News alert!
And on July 1 the market learned the true extent of Gill’s position in CHWY. See my post on X below with the SEC filing:
So Roaring Kitty has filed that he owns 9,001,000 shares of $CHWY which is worth roughly $300 million at the current price and he included in the filing "I am not a cat" LOL…and now $GME is tanking as it looks like he'll try to squeeze $CHWY instead…what a world we live in! pic.twitter.com/tuIjMSJtdC
— Timothy Sykes (@timothysykes) July 1, 2024
Now, for the chart …
CHWY spiked 35% after Gill’s post on X. The price spiked 25% after we learned of Gill’s multi-million dollar position.
On the chart below every candle represents one trading minute:
Now, the spikes are fast and the chart is currently trading below pre-spike levels.
But there’s a key reason I’m still watching this stock.
The CHWY Play
First of all, I already traded this stock for a small profit in July.
I played a panic-dip-buy pattern as the price was falling. We can play both sides of the spike using my tested trading framework.
My trade notes are below:
It didn’t go as well as I wanted it to, but I still got out with a small gain. That’s a win in my book!
Plus, there’s still a chance to profit on this runner. I’m ready to get back in.
That brings me to my second point … CHWY is still above key support. And the last time Keith Gill played a stock (GME) he held shares for YEARS.
The price doesn’t have to break out today, or tomorrow, or next week. One of Gill’s greatest strengths is the absurd amount of time he holds his meme-stock positions.
Take a look at the CHWY chart below, every candle represents one trading day:
Please excuse the clutter on that chart … Hopefully you understand what I’m getting at:
CHWY is still above support set by bullish earnings from early in June. And it could use that level to surge toward new highs in July.
The legendary spike from GME started similarly, slowly moving above support until a massive breakout.
See the multi-month chart below, every candle represents one trading day:
This hype can build. Whether it’s GME or CHWY …
Day to day. Week to week. And month to month.
Set an alert in StocksToTrade and get ready for some more insane price action! We’ve seen crazier things happen in this market, LOL.
Cheers.
*Past performance does not indicate future results
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