Wayfair (W) New Stage 2 Breakout Buy
Wayfair is the kind of stock you can make a lot of money on by catching the early move. It has household name recognition, trends well, follows the traditional growth stock stages, and is both large enough to attract institutional investors while still being small enough to deliver triple-digit gains. In 2020, for example, shares surged 1,500% in just over five months.
A quick look at a longer-term chart and you will see what I mean.
The stage analysis above highlights the 4 stages of the stock cycle. This is based on the work of Richard Wyckoff and Stan Weinstein - both legends of the industry. A stock entering a new Stage 2 uptrend is at the ideal buy point. When timed correctly, these can lead to extraordinary gains with limited downside risk.
The line in the sand for W is at $75 per share. This is the pivot point, the breakout trigger, key resistance... whatever you want to call it. In the weekly chart below you can see the significance of this level.
It served as short-term support on the way down and then became resistance which has held the stock back for over a year. In my opinion, the move above this level last month was a failed breakout in a weak market. This is not a reason to pass on the second attempt.
W has consolidated nicely on a series of shallowing retracements and its 10, 21, and 50-day moving averages merging to offer support at today's price.
One other catalyst... Overstock.com (which Wayfair also owns) plans to re-brand to something even more recognizable - Bed, Bath & Beyond. It bought the name, domain, and loyalty program assets on the cheap when the company went into bankruptcy a few months ago. This re-brand could be the fresh start the company needs to jumpstart sales growth and trigger a new Stage 2 uptrend in the stock.
A move above $75 would confirm the move, and that is where I will look to buy.
A quick look at a longer-term chart and you will see what I mean.
The stage analysis above highlights the 4 stages of the stock cycle. This is based on the work of Richard Wyckoff and Stan Weinstein - both legends of the industry. A stock entering a new Stage 2 uptrend is at the ideal buy point. When timed correctly, these can lead to extraordinary gains with limited downside risk.
The line in the sand for W is at $75 per share. This is the pivot point, the breakout trigger, key resistance... whatever you want to call it. In the weekly chart below you can see the significance of this level.
It served as short-term support on the way down and then became resistance which has held the stock back for over a year. In my opinion, the move above this level last month was a failed breakout in a weak market. This is not a reason to pass on the second attempt.
W has consolidated nicely on a series of shallowing retracements and its 10, 21, and 50-day moving averages merging to offer support at today's price.
One other catalyst... Overstock.com (which Wayfair also owns) plans to re-brand to something even more recognizable - Bed, Bath & Beyond. It bought the name, domain, and loyalty program assets on the cheap when the company went into bankruptcy a few months ago. This re-brand could be the fresh start the company needs to jumpstart sales growth and trigger a new Stage 2 uptrend in the stock.
A move above $75 would confirm the move, and that is where I will look to buy.
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