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Preface: I wrote this specifically for a subreddit dedicated to CLOV, so the "voicing" here is intended for them, not WSB; however, they encouraged me to post the DD here, so here it is if you're interested in some TA on a meme stock that might have a turnaround.
Full disclosure: I am currently holding a losing position in this stock after the June runup. I do not care if you are bearish on this stock or if you think I'm a clown.
I am writing to you today to discuss some technical analysis of the stock and why I believe this current trading channel we are locked into may be seeing an end in the near future, and that some mega price movement may be on the way. All of these opinions are my own, they are for entertainment purposes only, and none of this is financial advice in any regard. This is nothing but pure conjecture based on my smooth-ass brain smashing keys and mouse clicks while drawing with crayons.
Our MACD very low, and the 12 Day EMA very recently crossed over the 26 Day EMA. This is, for us, historically bullish. Let's take a look at history, and look at this chart with my terrible marker crayon drawings.
August 28th, 2020: MACD crosses above the signal line, with a price of $10.43. October 5th, 2020: the last day with the MACD above the signal line, the price closes at $12.68, after seeing a highest peak of $13.22 during the run up for the month of September. $2.79 (+27%) climb in price between bottom and top
November 4th, 2020: the MACD crosses above the signal line, after a month of being below. The price fell from $12.68 down to $10.06 during the decline, with $9.87 being the lowest point of the run. January 8th, 2021: the last day before the MACD falls below the signal line, the runup lasted two months, and closed the day on $15.90, after a new ATH of set $17.45 during the stretch. $7.58 (+76%) climb in price between top and bottom
January 9th 2021 to February 3rd, the price remains stable in a channel between $16.84 and $13.10, mostly trading sideways.
February 4th, the Hindenberg report is unveiled and the price drops $1.72 the next day, from $13.95 down to $12.23 at close. For the next month, the price continues to plummet down to as low as $6.31. (MACD still under signal line)
March 11th, brings sweet salvation, as the MACD crosses over at the price of $8.67 for the day and it continues in strong momentum for two months until May 5th. During the run, the price went from as low as $7.19 to as high as $10.17, for a maximum gain of $2.98 (+41%) between the top and bottom prices.
May 27th, the MACD again climbs above the signal line with a closing price of $7.83. It is only twelve days later that this MACD climb sends CLOV from the depths of $7.83, up to the new ATH price of $28.85, before later falling down below the signal line on June 17th (20~ days), with a maximum gain of $21.02 (+368%!!!) since the crossover.
Now, this brings us to today. On August 2nd, our MACD crossed above the signal line again, and we have continued to remain above it (with increasing distance between the lines!). In the previous instances we've examined, the time between the MACD crossing above the signal line and below has lasted as little as 20 days and as long as about two months. In every case of the crossing, we have seen an overall price gain, with a minimum of $27% gain between peaks of the run. The last time we had this crossing, we had a fat, juicy gamma squeeze taking us to to stratosphere, but not quite the moon.
We are now here again, above the signal line, in the early stages of gaining momentum. Every time prior, we have seen gains, and the gains have continued to be big each time that no one should sneeze at. If this trend holds up, we should see momentum carry us beyond the $8.50 line of resistance we are facing, and push us into some higher values where we don't know what to expect... or do we?
Now if you don't know, Bollinger Bands (BB's) are an interesting type of technical indicator that are used to help determine overbought/oversold stock, and they also have a fantastic capacity to show price consolidation and anticipate breakouts. Essentially, the BB's calculate using EMA's that help determine movements of standard deviation for the stock, such that when a stock is overbought or oversold, you're outside the scope of the bands and there's a chance to make a play.
What happens, however, is during moments of strong consolidation, the bands for the stock get very tight, because there's almost no fluctuation in price. What this does is create "squeeze" signals, anticipating that there may be a strong breakout in the stock (in either direction) in the imminent future. What do CLOV BB's look like? I'm glad you asked.
Take a look at this chart with yet more terrible crayon drawings because I won't pay for a premium service to allow me extra charts and my current one I use is covered in even more crayon shit you don't want to see and I don't want to show you.
Similar to how the MACD provides a strong indicator for bullish momentum in a stock, our Bollinger Bands are telling the same story in every piece of consolidation. Every time our bands get tight, we move up. What are we seeing right now? Our bands are getting tight after some pretty wild frequencies.
Another fundamental trading tool, the Relative Strength Index (RSI) helps us measure rates of a stock being oversold or overbought in a perspective of momentum. This oscillating graph draws with crayons in a chart with values between 100 and 0, helping us see when stocks are being overbought (with a value of >70) or oversold (<30). The RSI is a kind of fascinating tool to watch because it can (not always) be predictive of human behavior, and can signal when long term or even momentary price changes are incoming.
Well the RSI is important to us because it was not too many days ago that we hit RSI values below 30, signaling to the world that we are very oversold. It doesn't take a brain to see it with the price, but the MACD similarly showed this heavily negative sentiment as it declined.
The good news is that more often than not, once a stock starts breaking into oversold territory, it's likely due to rebound in the opposite direction in the near future. In the case of CLOV, every approach (and breach) of oversold has reduced in a reversal and strong buying sentiment within a few months. Exciting, bullish news.
We've been trading sideways for what feels like an eternity. We have spent fourteen of the last 16 trading days moving sideways between the prices of $7.67 and $8.59. We had a momentary breakout for two days in the middle of this, before we were sent back down fast and hard. And even with the current price, the stock is doing remarkably well maintaining that $8 line for the most part. Although we have fallen below $8 11 times within the last 16 trading days, we have only finished below $8 once.
At this time, Ortex is showing about a 90% utilization rate of the current shorts available, and a 22% SI. With utilization at that high of a level, overall, shorts are fairly thin, but not as thin as I'd like it to be. Yet, even with all of the weird price action and fuckery and short availability, investors are still maintaining this $8 support line very, very well. For the current utilization rate of shorts, and how well our price is doing, we have a strong backbone growing that appears to be giving us a lot of strength as we approach what looks to be a potential bullish run. I expect that the amount of shorts that do exist will probably be used to fight us on the way up, but the supply at this time seems to be generally limited.
After our last runup, we got a lot of attention from people. Our membership since my time of joining months ago has moved from 6,000 to now 40,000 members. We are known and talked about as a short squeeze candidate by the media. We are known on Reddit. We have a big movement with our beloved YouTubes who are spreading awareness of the stock on Twitter, Stocktwits, YouTube, and elsewhere. We are definitely not nobody at this moment. There is, in my opinion, a powerful audience of people who could be eager at the chance to hear of some intense price movement in this volatile stock of ours, and we definitely have the reach to spread the word fast in the event of a bullish runaway.
Some of this might be some real amateur analysis to some of you, and if it is, that's okay. What I am seeing here are four powerful pieces of tangible evidence that are all pointing towards a potential bullish run in the incoming based on the following:
Every MACD crossover the stock has had up to this date has proved itself to be gainful. We are just now in the crossover.
Every MACD crossover has seen nice returns in a relatively short span of time, with gains as high as 368% (gamma squeeze) within about 20 days, to as low as 27% across two months. Our stock is much more volatile and observed now than it was when we gained 27% in two months. If we see movement, I expect we will see movement fast.
Every Bollinger Band's (BB's) contraction has lead to bullish momentum and outbreak in the time leading out of the contraction. We entering a tightening contraction.
Every BB's contraction has been coupled with a recent cross above the MACD Signal Line. We are entering a BB's contraction with a recent cross above the MACD signal line.
Our RSI is moving from oversold into the direction of overbought. Buying momentum is on our side.
Every time the CLOV RSI has approached (or touched) the Oversold status, we have had buying momentum carry us into the bull run. We are due to swing into heavy buying territory with the RSI at its current level.
Our social media presence is big and people are interested. If price movement gets volatile, there will very likely be crowds ready to get in. (Can anyone say, "Opportunity for a gamma squeeze?"
Take all of this together, and what do we get? A strong historical trend of a stock that has shown itself to run positive when technical indicators align, and they can do this in predictive, consistent patterns. The MACD is bullish. The RSI is bullish. The Bollinger's Bands are bullish. The price stability and support level is bullish.
Every time these indicators align, the stock sees upwards movement within weeks to months. I don't know about you guys, but with the fuckery of 20 million FTD's, high SI%, high short utilization, and all of these bullish signals, in my non-financial advice opinion, this seems like a stock that's ready to run and it's only a matter of time. This screams mega-bullish to me.
What happens with earnings upcoming here could be interesting. It could either catalyze or it could really hurt us depending on the aftermath. I'm inclined to think that if there's a negative reaction, it can only be so strong because many of current CLOV holders bought above current prices and selling doesn't make much of a difference. I really do not know who else would be selling the stock in a situation like this, because we do appear to be essentially bottoming out in terms of price. If there is a negative response to earnings, my hope is that holders will maintain the $8 support line.
In summary, a lot of positive technical indicators that have always shown growth for CLOV are aligning. I am expecting a price upswing in the coming weeks because of this, and further, because of our delicate social situation, I think there is a chance that there is a possibility for FOMO and/or a Gamma Squeeze because of the interest of onlookers. People know this stock wants to short squeeze, and those who want to play the odds may buy options on the way up. Statistically speaking, we are going to climb full dollar amounts, because every time these technical indicators align, we have (so far). Who knows how hard or fast this will go, but I am personally expecting that we will be breaking this $8-8.50 trading channel soon in the coming days/weeks, and there may be a metric shit ton of momentum that awaits to give us a kick once we do. Let's see how earnings goes first. BULLISH .