Is WallStreetBets legit? A trend analysis on the options trading sub-reddit.
They always make fun of us traders here at r/WallStreetBets, but who *really* has the last laugh? Is it us Chads while we eat our crayons on the way to the Lambo shop? Or are the virgin traders truly one step ahead of us?
I’m going to show you something. Something that’s never been seen by human eyes, never computed by any type of algorithm, something our wive’s boyfriends wouldn’t even pay attention to. This is the WallStreetBets sentiment and hype detection.
I’ve come to the conclusion that WallStreetBets is #1 when it comes to finding trends and finding stocks. It doesn’t matter if this is after-the-fact that the stock price shot up 50% in 2 days. It doesn’t matter that the stock is something nobody paid attention to until finally the whole world start trading it (PLTR). What it comes down to is the fact that WSB will find literally any stock after it has already mooned. Stock up 10% for the day? WSB knows about it. Stock up 20% in the last week? WSB has already traded it. It’s genius.
Here’s the kicker. *Most* times after a stock has mooned once and WSB hops on the trend, the stock will go through another 1 or 2 periods of “mooning”. If you are new to the industry of printing tendies, grab a tequila on the rocks and have a drink with me while I go through some sentiment on the WallStreetBets forum.
I’m not even going to start with PLTR (Palantir) because that would be too obvious. Let’s start with XPEV. To check out some of these sentiment charts for yourself, SwaggyStocks — Trend Analysis does a great job with analyzing anything that has to do with stocks on WallStreetBets.
Look at this sentiment chart. The stock wasn’t even mentioned a single time until some autist found an alternative EV company to gamble on after it shot up 10% in a single day.
1st wave sentiment peaked at 3% of the sub-reddit’s comment volume. What happened next? The stock stayed flat for 7 days and you autists completely forgot about it. Next stop — Wave 2: Comment volume peaking at roughly 5% of all comments after the stock price went from $33 to $43 in one day. Massive spike in chatter around the ticker and the stock price continues it’s meteoric climb for a whole month. You can see another 1 or 2 waves where sentiment rises after big moves in stock prices.
Next up is Corsair Gaming. None of you autists even knew the stock existed 2 months ago. We can see wave 1 happened early November with small gains in the stock price. Sentiment was steady as autists everywhere were drooling over consistent gains for the first time, loving every minute of it, kind of like when you kiss your cousin for the first time. Wasn’t long after we see wave 2 and 3 of the trend where the stock continues it’s mission to Mars.
Next we’ll look at LI. 99% of you, including myself, don’t even know what this company does. All we know is that STOCKS ONLY GO UP. The first wave happened 3 weeks ago when comment volume reached 5% of all the comments on the sub-reddit. Stock price shot up 30% in a single day. Sounds insane that the momentum would continue upward, but it has. Not only that, the stock price has gone up another 30% in the last 3 weeks.
The PLTR sentiment chart is nothing short of magnificent for a sentiment junkie like myself. Comment volume has been rising at the same rate as the stock price. On Friday roughly 50% of discussion comments mentioned the ticker PLTR. Something that you either loved or found incredibly annoying. The only other tickers to ever break the 50% comment volume barrier are Tesla and NIO.
What’s the next meme stock going to be? Is it GME? Do we regress back to PRPL gang? Nobody really knows, but one thing I can agree with is that wave 1 of the trend is almost always the early adopters with gorilla balls willing to risk large amounts of capital on a stock nobody’s ever traded before. Once a few believers hop on the train the whole sub-reddit jumps on the bandwagon headed to hell or Valhalla.