![Ready, Set, COVER! Breakouts Are A Short Seller’s Worst Enemy](https://stripesandstarsnews.com/wp-content/uploads/2023/01/f2eaf695-4bfa-4b18-a5f8-29a916cfda4f-z4hxZc-850x560.jpeg)
Ready, Set, COVER! Breakouts Are A Short Seller’s Worst Enemy
It was one week ago that I wrote about Wayfair’s (W) big breakout in the Don’t Ignore This Chart blog. It had just broken above key resistance and volume accelerated to its 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 take a chance on massive unlimited losses as the strength continued. The smart ones ended their pain. For others, it’s become possibly the worst migraine imaginable! I said it would be an interesting week and it sure was as W gained another 36% last week. The bad news for the short sellers is that I don’t think the pain will subside next week either. Here’s the chart, showing yet another closing breakout on Friday’s close:
The volume last Monday set another record as 27.5 million shares changed hands. Many short sellers heeded the breakout and ended their misery after taking a big loss. Others stubbornly refused to give in and they are likely to face much more pain in the week ahead.
Did you miss this exciting opportunity on W on the long side? Well, I believe we have another stock that looks almost identical to Wayfair and it just broke out on Friday on more than triple its normal volume. There’s an increasing chance that we see an explosion higher next week. I’m featuring it on Monday morning in our FREE EB Digest newsletter. If you haven’t already subscribed, simply CLICK HERE and enter your name and email address. There is no credit card required and you may unsubscribe at any time.
Happy trading!
Tom