Stock of the Week Tape Teardown

I like it when the decision to buy or ignore is binary. It’s either go, or no-go. With that in mind, let’s do a Tape Teardown.

The weird thing is, this trade was a textbook day 3 surge, but it happened on day 4. And the trade plan was laid out to a T on the Sunday Setup…

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The Big Picture

For anyone paying attention, there was a ton of upside…

Starting last Wednesday (Nov. 4), Ohmyhome Limited (NASDAQ: OMH) has been a banger, with several opportunities to trade it

Let’s zoom in on…

The First Three Days of the Move

Notice that there was a big run on day 1, followed by sideways chop on day 2. That’s a box-checker for the day 3 surge pattern:

Obviously, it didn’t pan out. But that’s why I’m doing a Tape Teardown of OMH, because there’s a big lesson here.

It was also setting up for a textbook Friday squeeze. So, it was my Capital Wave Trader idea going into Friday:

The stock never hit the panic point on Friday during premarket or regular hours. But notice where it ended up in after-hours trading:

Let’s zoom in again, this time to Friday’s action. The way it squeezed shorts in after-hours helps explain what happened on Monday:

For most of Friday, short sellers were in control, okay? There’s no doubt in my mind that OMH was heavily shorted at 4PM ET.

Now, if you’re a short seller going into the weekend, what’s the smart thing to do?

If you’re in a winning trade on a stock with a recent history of spiking in after-hours, you cover.

That’s exactly what short sellers did, and it started a buying frenzy.

It was not a perfect short squeeze, but it caught my attention because the stock ended up close to the panic point I alerted on Thursday evening.

That’s why, on Sunday night…

The Plan for Monday Was Laid Out to a T

Every Sunday, I do a free live show called the Sunday Setup. Anyone who tuned in got the trade plan.

Before I show you exactly what happened with OMH, be sure to follow the link below to get access to StocksToTrade Network.

On the Sunday Setup I went through the trade plan for OMH, which was really the same plan laid out in my Capital Wave Trader Report last Thursday.

Here’s what happened on Monday…

Now, Higgins captured that chart when OMH had hit $36. It squeezed all the way to $85. Then, after coming back down, it squeezed again yesterday:

My Take

This trade plan was simple:

• If OMH gapped up on Monday, it was a no-go. The company would probably do an offering, okay?
• If it gapped down, and then came back up to the panic point at $15.50, it was a buy. The target was $20 per share.

Of course, I had no idea it would go all the way to $85 per share. Or that it would get to $94 yesterday. And it doesn’t matter because the trade plan was a simple approach in a world where most people overcomplicate things.

Watchlist

Pixelworks Inc. (NASDAQ: PXLW) was a contract winner yesterday after signing a multi-year deal with Meta Platforms (NASDAQ: META).

PXLW hit the Oracle signal early and then pulled back. I like the way it reclaimed VWAP and started consolidating right near the Oracle signal.

If it holds, look for a day 2 continuation play. If it continues to chop sideways, watch for a day 3 surge tomorrow.

On My Radar

• CPI showed that inflation is “uncomfortably high”
• That opens the door for a rate hike in December
• Once you see it, you can’t unsee it (this pattern changed my approach to trading forever)

*Results not typical. Past performance is not indicative of future results