The rise of Bed Bath & Beyond Inc. (NASDAQ: BBBY) has sparked a resurgence in other meme stonks…
After hours on Thursday, two more meme stocks skyrocketed. And on Friday, another one joined the momentum…
I love the opportunities these stocks can create. But the moves can end badly…
You probably say how it played out when the air came out of them in late 2021.
Many hold and hopers and ‘apes’ got crushed! I don’t want that for you…
Don’t get caught up in the hype, news, or past performance of these stocks.
Today, I’ll tell you what they are, how to trade them, and whether they’re still in play this week…
Meme Stock Madness to Watch
Bed Bath & Beyond Inc.’s (NASDAQ: BBBY) hit maximum squeeze mode with blow-off-top volume on Thursday — it traded over 320 million shares that day!
That sparked other meme stock rallies…
At around 3 p.m. Eastern on Thursday, BBBY was breaking above its high of day. After that, it soared from around $4.75 to almost $6.
Right around the same time, Blue Apron Holdings, Inc. (NYSE: APRN) broke its daily high of roughly 87 cents at around 3 p.m.
And it soared to over $1.40 after hours with no news!
Virgin Galactic Holdings, Inc. (NYSE: SPCE) also joined the momentum after hours on Thursday…
It shot up from around $4.65 to $5.60 after dropping a press release stating its “commercial service remains on track to launch in Q2 2023.”
But don’t be fooled by the news…
SPCE is up because its following meme stock momentum.
And with all of these stocks, you have to recognize what they are.
On Friday morning, I told SteadyTrade Team members to watch BBBY as the sector leader. And if it starts to fall apart, you should really consider enforcing your hard stops in APRN or SPCE.
And what happened to all three?
Look at the charts…
BBBY chart: 2-day, 2-minute candle — courtesy of StocksToTrade.com
APRN chart: 2-day, 2-minute candle — courtesy of StocksToTrade.com
SPCE chart: 2-day, 2-minute candle — courtesy of StocksToTrade.com
I’m not trying to scare you away from trading them. I’m not the boogeyman.
But you can increase your odds of success if you keep these two factors in mind when trading meme stocks…
- Stocks in a hot sector or theme tend to move together. The charts from Friday are a good example of that.
- When the air comes out of a stock, sector, or theme — traders get busy looking for the next one. As BBBY, APRN, and SPCE all deflated on Friday, Newegg Commerce, Inc. (NASDAQ: NEGG), another former meme stock, started spiking.
NEGG chart: 1-day, 2-minute candle — courtesy of StocksToTrade.com
With a market theme like this that’s based purely on momentum and hype, you’ve gotta follow the crowd. But that doesn’t mean chasing them…
It means trade whichever one has good volume and price action at the time.
What to Look For This Week
Just because most of these stocks had a red day on Friday, I’m not counting them out yet. We could see more momentum this week.
But I’ll only be looking for key levels where shorts will get nervous or scared out. And I’ll look to ride any potential squeeze to the upside.
With all of these meme stocks, stay nimble. Always have a trading plan and stick to it. And be ready to adapt quickly because all of these stocks are full of bagholders.
Give yourself a trading edge over all the other uneducated traders who believe in these companies — join the SteadyTrade Team for live lessons every morning and afternoon.
Have a great day everyone! See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S. Only two more days left to register for Mark Croock’s special event! Learn how he grew his small account with large gains this Wednesday at 8 p.m. Eastern. See you there!