ALL the credit goes to CHARTXZY here is the link to his profil and original Analysis.
Clover health has quite the catalysts not only fundamentally, but technically as well.
Technicals: CLOV has been in a downtrend since early January, with an all time high near $17.00, and all time low of near $6.00. Quite the range. Fibonacci retracement levels can give us approximate levels of support and resistance once a breakout occurs. As you can see, the daily chart here shows a SLIGHT breakout (See B2) above the downtrend, as also seen in April (See B1). Another green candle above the downward trendline would give me further confidence of a breakout towards first $10.50, and then $11.86 following, the retracement levels act as price zones of support and resistance for my trading style.
More on technical setup, we have a nice MACD convergence on the 1D chart, forming a nice consolidation for a breakout within the MACD , where I see a bullish reversal that can last long term.
Fundamentals: Not going to lecture you on the company, but rather give you some interesting catalysts and factors that will most definitely play into the price.
Short interest is over 50% of the float, which to me, gives a lot of potential for a true squeeze, higher than GME and AMC .
Because CLOV is a SPAC, insider shares have a lockup as well as a predetermined price that the stock MUST be trading at for 90 consecutive days before insiders can sell. that price is $30 a share. Meaning if they want to sell their shares, price has to be $30 for atleast 90 days.
Short positions are in trouble near the $11 level, meaning above $11, nearly 100% of all short positions are in the red, and losing money.
Shares available to be shorted as of yesterday was only 600,000.
EDIT: The above borrowing numbers are from the day the analysis was done, date can be found in the link.
With squeeze potential like this, such a large short percent of the float, and company insiders not being able to sell until $30 a share, expect nothing less of parabolic movement, but the real question is WHEN. Timing this will be a difficult thing to do, but I will be playing this with long term leap options as well as shares for accumulation.
EDIT: IMPORTANT, once CLOV gets over 11$ , it doesn’t mean that they will rush to cover right away , BUT they will be loosing money, the higher it goes the more they lose , and eventually The will will cover .
EDIT: It will be included on the Russel 2000 index on the 25th June, thanks for reminding in the comments.
This post isn’t meant as a financial advice, shouldn’t be taken as such. Just important information.
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