Short

$SHOP short idea (once again) - In advance of Earnings

Hi everyone,
I'm once again back to short $NYSE:SHOP ..
It is not because I don't believe in the company, because I really do, but just like the first time,
I am targeting massive FVGs made by huge gaps in the chart as TPs, and utilizing an improved version of the first pattern of Earnings.

Just to summarise it so that everyone can understand it without having to go back to the first published idea, I've noticed how the Shopify stock tends to follow a certain pattern of buys and sells regardless of the results of Earnings.. now, I don't know if this is caused by buy backs or internal company stock operations or some other cause, but I've simply seen how it tends to alternate between buy and sell, and when, for example, for 2 earnings in a row a buy happens (the stocks trends up) then it is followed by an equal amount of sells (so 2 down trends).

Now.... could this just be odds and for the last 4 years this was just randomized and ended up doing exactly this? Idk maybe, but I'm not a genius in a lamp, so I'm speculating.

All I know is that:
- there are 2 massive gaps in the chart, worse than the last time,
- price is currently struggling to head higher (perhaps just waiting for Earnings to choose direction),
- we have just terminated one of those double down events where 2 selling earnings happened and right after 2 buy earnings happened,

Now... there are 2 ways to approach this, and these are the following:
1- The first method is to try and "predict" the top of the market by selling 3 days before of earnings just like the first time and hope for the down trend call to be true;
(something like this

)
2- Actually wait till earnings day comes and wait for the 1d candle of the earnings day itself to close and tell if it was either a bullish or a bearish one and from the next day, start either buying or selling depending on the trend.
(something like this

)

If you choose the latter, then you don't really have to worry about "predicting" the market and all you got to do is develop a entry strategy, you could either buy the dip/sell the top (depending on the trend of the earnings' candle) so that you can get the lowest entries, or you could just enter on each candle that moves the direction of the trend you are following (so for example if the trend is bullish, enter only on bullish candles close to follow your bias).

I'll post a follow up of the last entry option as I have developed a entry strategy to do just that, with the help of my friend D499 who condensed it into an indicator (as I can't code).

I'll post comments to this post so that I can keep up with how things proceed and perhaps if the second scenario takes place I'll Live follow up so that all of you can see the idea.

Reminder, it's just an idea ;)

BancoMatt

Also on:

Related publications

Shopify Short Position - idea

by BancoMatt

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

BancoMatt

Also on:

Related publications

Shopify Short Position - idea

by BancoMatt