What an epic day for Oprah Winfrey, weight watchers and for everyone that was long on this one today. Today being the 19th October 2015.
Weight Watchers with the ticker symbol being $WTW soared into supernova mode from 07:05hrs onwards today, and I want to use this as an excellent example as to why you MUST be prepared and ready to trade even BEFORE “PRE” Market Open!
By checking for juicy news like this around 6:30am (10:30am in the UK 🙂 )you can get lucky if you spot this news before market activity commences.
Now by lucky I mean you have to come across this kind of news as soon as possible in order to maximize profits, but even after traders start piling in their buy orders you can still join the ride by piggy backing the movement that other traders have already started, especially with something as big and bold as this news!
With a celebrity like Oprah and billionaire that she is, you can pretty much guarantee that this will shift the stock in a tremendously big way!
Here’s a Simple Chart of $WTW
Here’s Why $WTW went SUPERNOVA
When a Billionaire comes along and invests in a company like $WTW (Here’s the SEC Filing) or any company that’s listed on the stock market, you can guarantee that the Billionaire has invested in them for one thing and one thing only, and that’s to make serious money.
Of course it is also great when they help a company out in need and turn it around for the good of all kind with the company as well, but serious profits are generally their main vision.
Lets focus on Oprah for a second first
First off we all know Oprah Winfrey and we all love her for who she is, well apart from some sales clerk in Switzerland that wouldn’t sell her a $40k handbag, but that’s another story!
You got to understand that someone like Oprah has the ability to have a huge impact on any product or service because of her status and the fact that she is hugely idolised by many people all around the world gives the capabilities of things going viral very quickly and becoming a big hit.
Now Lets Look at Weight Watchers
Weight Watchers share price has been sliding down the scale since around 2012, which is generally not a good sign for traders that want to buy and invest in the stock, which is also why the volume has been relatively quiet the past few months for buyers.
If you take a peak at the amount of shares short (figures will change obviously) on this stock though, you would see that there is going to be a short squeeze somewhere along the line. With over 15 million shares short you can be very sure that with some juicy news like Oprah Winfrey coming into play that the shorts are going to panic and cover.
With the panic of the short sellers covering and buyers adding on top of this you get your share price going into supernova mode.
With obesity being such a huge problem all around the world and being such a huge business/industry to attend to, adds as another factor to the equation. I think Oprah is the perfect ambassador to join weight watchers to help improve this problem in the world, and with her on the board for at least 5 years this stock will go higher.
So Lets Recap What Made $WTW Go Supernova
This is how $WTW rolled out today in a nutshell:
Weight Watchers has a small public float of around 50 million shares. (Low Supply)
About 15 million of those shares are in a short position.
Oprah Winfrey Invests just over $43 million (10% stake in the company) on 18th October (according to SEC File).
The news of Oprah’s investment is released 6:45am on the 19th October 2015 (Check Here)
As soon as Pre Market trading opens, some shorts start covering their positions and $8 soon goes up to $12 for those that are prepared which happened quite quickly and along with the gap up from Oprah’s investment over the weekend just gone.
The closing price for the last trading day on Friday 16th was $6.79 and Oprah’s buy gapped it up to $8.00.
The buying pressure from the normal buyers as well as the shorts covering on top creates double the amount of buying demand and more, which pushes the share price up into supernova mode.
Simple Pre Market Chart Of $WTW
With catalysts like this, Weight Watchers was the perfect stock to catch if you were prepared and spotted the news at the right time. You really don’t want to chase stocks like these, but more so get in as early as you can by being ready and prepared for action even before PRE MARKET OPEN!
~Billionaire Plays are one of the Best strategies to utilise in your Trading~
No I did not trade this as I’m still at my day job, but only 19 working days left to go now Wooooo Hooooooo 🙂
There’s another cup and handle pattern play I’ve spotted on a different stock, but I will write about that in a future post. Oprah Winfrey was the star to write about today. We Love you Oprah 😉
Till next time, you must understand that you need to study from the best if you want to learn how to do this stuff, and if you truly are passionate about your freedom then you will find a way. If I can read a book and learn how to do “xyz” then so can you. 🙂