The Michael Burry GEO trade
Updated
Just analyzing this purely technically because I like MB and as of now supposedly this is his only long holding. Now, keep in mind this is not a stock for everyone - "The GEO Group, Inc. is a publicly traded C corporation that invests in private prisons and mental health facilities in North America, Australia, South Africa, and the United Kingdom."
So yeah, a lot of people including myself will have problems giving money to this, but when we analyze it purely technically, I can see why MB is very bullish on this for the long term.
First of all, we've broken an enormous MONTHLY downtrend (right side chart is a monthly chart) and we're basing with bullish divergence on the daily chart (left side) - that's usually a good thing to be looking for when trying to ID possible bottoms. Buyers may not all be there, but sellers are starting to dry up. Could it go lower? Absolutely. Then there's the Monthly RSI on the right side chart - enormous bullish divergence within this basing. On the left chart we can see it is retesting a previous resistance area (7.25-7.50) which should now be strong support.
So, I can see why this is very interesting to Mr. Burry. I don't recommend anything, but I thought it was a good example of what these gurus see before things blow up.
So yeah, a lot of people including myself will have problems giving money to this, but when we analyze it purely technically, I can see why MB is very bullish on this for the long term.
First of all, we've broken an enormous MONTHLY downtrend (right side chart is a monthly chart) and we're basing with bullish divergence on the daily chart (left side) - that's usually a good thing to be looking for when trying to ID possible bottoms. Buyers may not all be there, but sellers are starting to dry up. Could it go lower? Absolutely. Then there's the Monthly RSI on the right side chart - enormous bullish divergence within this basing. On the left chart we can see it is retesting a previous resistance area (7.25-7.50) which should now be strong support.
So, I can see why this is very interesting to Mr. Burry. I don't recommend anything, but I thought it was a good example of what these gurus see before things blow up.
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Looking good for bulls Note
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GEO now looks to be correcting it's up move. A pullback to 9-8 dollars is a strong buy IMO. Note
Geo pullback may be done but if it comes lower, I believe it's a strong buy. If it can get under 9, there is lots of support around 8.50. I think this continues past 20 this year. Note
Daily RSI already quite low on GEO, if the market bounces (i think it will soon) Geo may outperform to the upside. Expecting at least 11 dollars for the near term target. Note
correction looks to be over on GEO, either it tests the recent highs and fails, or we start a new more powerful leg up towards the 20's Note
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be careful of a possible inverted head and shoulders bottom here - if so target is around 4100. Note
futures is looking like a triangle or consolidation before a break up as of right now. B waves are choppy and this is feeling and looking like a B. If we break up, think it will test the previous support area. Note
geo is finding support at the monthly 18 and weekly BB combo, it should not go lower if this analysis is correct Note
well, it did go lower, but now it's at previous support. I still think this is an objective buy for a longer term swing trade to 20. Note
Geo rsi may pullback with price but then i expect a healthy bouce to the gap at 11 Note
support is holding with low weekly rsi, to me this is a buy Note
support held and now we have a nice pullback, to me this is a buy 
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