The 14% gain on Tuesday has bulls wanting more

  • WISH shares climbed 14.6% on Tuesday.
  • Volume was average, peak appears due to retail crowd appeal.
  • The objective of long positions is to force short pressure.

ContextLogic (WISH) jumped 14.6% on Tuesday in the retail crowd’s attempt for a year-end rally. The news remains grim for the waning ecommerce company, and shares sold off somewhat on Wednesday before market launch before rising 1.3% at the opening. Boosters are hoping for a short squeeze due to the stock’s high percentage of short selling.

WISH Stock News: bet on the squeeze shorts

WISH stock market news has been dismal for the second half of 2021. On November 10, the company announced that its CEO would be replaced by February 2022. The company spent more than $ 900 million in the first nine months of the year. Third-quarter results showed revenue fell 39% year-on-year and average monthly users fell 40%. It seems the two-way e-commerce newbie has lost momentum. Before this year, the company had seen its turnover increase steadily from 2017 to 2020.

The bulls in the stock are focusing on the strong short sale going on. About 26% of the float was bypassed at the end of November and new data is expected this week. Additionally, some of his fans cite data showing insider sales have leveled off since the first quarter, although outgoing CEO Piotr Szulczewski continues to sell shares. Others point to the consensus price target of $ 6.19 on the stock, which features an 80% rise.

Either way, what is a fact is that $ 10 call options with an expiration date of January 21, 2022 are bought quickly. Almost 24,000 contracts have now been bought and open interest sits above 35,000. The bulls hope that by pushing up the price of WISH, the shorts will be forced to hedge.

Skeptics have a different point of view:

WISH key statistics

Market capitalization $ 2.3 billion
Prize / earnings N / A
Price / Sales 1
Price / Reservation 3
Enterprise value $ 1.1 billion
Operating margin -31%
Profit margin

-34%

52 week peak $ 32.85
52 week low $ 2.94
Short interest 26%
Wall Street average rating and target price Hold, $ 6.19

WISH stock forecast: $ 3.95 or bust

When a stock has lost 83% of its value since the start of the year, it’s usually not a good bet. This is the case here, but if traders are passionate about WISH then they should expect a close above $ 3.95. It was the peak of the swing high in early December. If the bulls cannot reach and exceed this level, then a further large-scale price spike is unlikely.

Bulls should also wait for the 9-day moving average to break above the 21-day, which is currently $ 3.53. This is better confirmation of a move higher than simply seeing that the Moving Average Convergence Divergence Indicator (MACD) has already passed the milestone. Support remains at $ 2.97.

1 day WISH chart


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