Meme stocks welcome 2 new kids on the block. On Friday, Phunware and Digital World Acquisition Corp went through the roof and ‘classic meme stocks’ like Gamestop and AMC Entertainment dropped significantly. There is clearly a new paradigm in meme stock land. It is becoming a small universe. Going forward, we can expect ‘meme stock rotation’. Interesting, to say the least.
Full disclosure: we are no fans of meme stocks, on the contrary. We may have dipped our toes in meme land once this year but that was more of ‘now or never’ type of trade in our premium services more than anything else.
It’s fun watching what is happening in meme stock land, and more importantly we want to warn our followers to primarily stay away from meme stocks.
That said, on Friday we saw a new duo took over control. In the spotlight this time, center stage: DWAC + PHUN. The PHUN chart is shown below.
More about why these 2 new meme stocks went up in this article this MarketWatch story >>
Hint it’s related to Donald Trump. As explained in this article it seems that Donald Trump is trying to make up his big drop in his personal wealth (during his presidency) by meme stock investing.
Surprise surprise, classic meme stocks Gamestop / AMC / BlackBerry / Kodak dropped significantly on Friday. GME for instance is rejecting its 12 month rising trendline.
Clearly, there was an outflow of capital out of ‘classic meme stocks’ into ‘the new meme stocks on the block’. It’s no coincidence that these 2 new names went ballistic on the same day ‘classic meme stocks’ dropped (on a mildly bullish day for stock indexes).
Frankly, the BB chart looks more constructive than GME. But again be careful with meme stocks, you have to be a great trader if you want to touch them.
