Time to switch from Momentum trading to mean reversion in GME

6月13日

GME
The latest Short Interest data has been updated recently by FINRA. Keep in mind that SI data always lags by two weeks as they are introduced.
The SI data with a settlement date of May 31 shows that SI has dropped from 22% to 15%. This is a massive drop as it is the lowest number of shares short in nearly 2 years.
This also explains (in hindsight) why the gap up on the next trading day (June 3rd) immediately fizzled as there was not as much juice to support the run as before.
See chart image below for SI and other financials.


We are now in dicey territory. GME is not a small cap stock; it's a 9.5B Market Cap.
Investors reacted differently to it this time than they did the last time Redditors took this stock to the moon.
Investors quickly abandoned their shorts. They are much less stubborn this time around than last time and certainly don't want the headlines.

Thus I would argue that looking for momentum breakouts maybe reckless here. There is a good chance that this stock is done for and will peter-out back to it's normal downtrend.
But whether it does or it doesn't, a mean-reversion trade is in order. Either as a dead cat bounce or as a setup to shake out unserious hands, lure in shorts and gather enough momentum for the next bullish attempt.

Blue arrow at $21.54 shows minor resistance (TA shown on black & white chart) but I think we will get a flush down to the cyan arrow at $18.06.
I will be looking to buy it there.
Anyway, that's what I am doing with my money, you do you.
Good luck.

6月17日

ノート

GME is dropping in value as expected. Remember that Roaring Kitty has a 120k calls at $24 strike for June 21st expiry. Since he bought them at $5.67 he has already lost more than half his money as the contract already closed at $1.80
I suspect that the stock will continue to fall to my cyan arrow mark and RoaringKitty's calls (all $68 Million of them will expire worthless).
So far the thesis is panning out. I will hold until cyan arrow and initiate my buy there. I think the price will increase from there but after RoaringKitty's position expires this week.