It was all the rage in 2020, when everyone thought the “new normal” would force us all to cower in our homes forever.
Or at least, until our vaunted health experts in the permanent bureaucratic state said it was safe to come out…
But I digress…
You remember Peloton right?
Everyone and their brother was singing its praises in 2020…
But a dismal earnings report in 2021 sent this puppy on a multi-month death spiral to the gutter:
Stock Chart
You can almost hear the whistling sound of this sucker falling out of the sky…
Typically, “broken momentum” stocks aren’t a good play…
What with all the “falling knife” metaphors you’ve heard 1000 times.
But, when you get in a situation where all the bad news about a company is baked in… it can be a nice opportunity.
It’s obviously silly to simply pick up every stock that makes a new low…
What I like to do is take the swing AVWAP from the most recent pivot high and look for price to take it out.
A few days ago, the stock broke above the first AVWAP, and ran to the next one.
This is evidence that the selling is over, and you now have a new group of investors who, from about May 2022, are now winners in the trade.
I have a screener that looks for stocks like this but I add a “spicy twist”…
I look for activity from a group of “invincible investors” who basically never lose.
It’s a great way to spot stocks that pop 50%, 100%, even 1000% or more in a short period.
If you want to know how I do this:
>>> Join Me For My “Saturday Night Live” Market Training And I’ll Show You How
