You may remember me getting involved with Wallstreet Bets and making profits on Gamestop. Well, the latest retail-investor fuelled rally is on AMC Entertainment Holdings. There is no way I’m buying this high and there are already signs that the markets might short it and it could fall very suddenly, especially if the hedge funds holding shorts on the stock decide to push more shorts into the stock.
I am worried about the following with regards to this stock:
- There is Hedge fund selling power in there and I worry that small traders may let greed overtake them and not HODL those stocks, just what happened with Gamestop. It will rally and then drop like someone jumping out of a plane with no parachute.
- I think people are religious about Wall Street Bets and that worries me. Trading in any sort is not a religion it requires both technical and fundamental analysis.
- What if Wall Street Bets is fuelled by Hedge funds? What if actually they are pushing people to buy it so that they can wait for the shorts to set in?
I would be incredibly careful buying anything at this price, to be honest, my temptation is to short it, but my ethics of big hedge funds destroying companies for profit stops me from taking this trade. At the back of my mind is the nagging feeling that this kind of behaviour in the markets does nothing to help people who work for the company as it slams back to a low price in a few days.
Greed is dangerous, focusing on one stock or commodity is also dangerous and I see way to much with this kind of play.
I enjoyed Gamestop and I took profits on it eventually. But this one, let’s wait and see. I would never buy a stock after a rally like this, it’s way too high and needs to come back before I go long. I’m going to evaluate it on the market open, but at the moment I don’t feel this is a trading opportunity for me.
Incidentally I did very well on AIRBUS yesterday after their huge rally.
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