Fascinating action in Weight Watchers Int'l (WTW) today, which had broken down on heavy volume last Friday and looked for the most part to be a late-stage failed-base in progress rallying up to resistance at the confluence of its 10-dma and 20-dema. In this market, however, the short side has been a low-probability play, even when the set-ups look like they are textbook.
Things change quickly and we frequently see the "Ugly Duckling Principle" come into play when things look, well the ugliest. Note that Friday's high-volume breach of the 50-dma by WTW turned into a supporting pocket pivot coming up through the 50-dma today. Such is the nature of a QE market. WTW closed 31 cents above its 10-dma, which was our guide for an upside stop on the SSS play. Could this reverse to the downside again? Perhaps, but it may be that the upside momentum in the market today created a situation where trying to short anything was essentially like trying to swim against the tide.
Short-Sale Set Up - WTW Second Follow-Up
|2 Jan 2018 18:21 ET
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.