024. PIGGISH PLAY - Short Jumia Group (JMIA)
Sincerely, please short this company.
If you've already heard of Jumia, then you probably don't need to read any of this - just know that it is a technical sell at the moment.
If you haven't heard of Jumia, then you're in for a treat. This ticker has been pumped by bulls and bears alike, sporting the title of "Amazon of Africa." Let me tell you, it is not. In fact, I've put together a Top-6 list of reasons why one should not hold this stock.
Ready?
1) It is not the Amazon of any continent; I would say that at best, it could pass for being the Stamps.com of certain small Caribbean municipalities. Maybe.
2) It's so very far from being profitable, let alone beating top-line estimates. See any financial report throughout its public existence.
3) There is a constant buzz surrounding the soundness of its financial statements. What I mean is that at least some people are spreading the rumor of fraud, which is almost worse than actual fraud. Definitely worse than declaring bankruptcy (Hertz, cough).
4) Wouldn't be shocked to see them declare bankruptcy by 2022.
5) The business model is predicated on the increased consumerism of African nations. Consumerism is an American-only kinda thing. Like, America can do this because it owns the global reserve currency. Africa may or may not increase its consumer-like tendencies at some point, but probably not during this pandemic. Or within the next 5 years hereafter.
6) The technical setup is such that there is very little room to the upside without making a new high. Since the downtrend is clearly impulsive and the uptrend is clearly corrective, the bias toward the next leg down is overwhelmingly probable at this juncture. If it makes a new high, just hold the short/puts because we're going to see a very common "irregular/expanded flat" correction which will end up overshooting to the downside in no time - should a new high be made.
Essentially, the only way you will lose here is if you buy puts that expire too soon. Hence, don't do that.
PIGGISH SPECS:
EQUITY: May be on the "hard to borrow list," which will make it difficult to locate shares that can be shorted without incurring a steep borrowing fee. This play is far more suited for Options anyway, but if you insist on shorting this the old-fashioned way, then take a look at the STOP-ENTRY-PROFIT-ZONE region on the right-hand side.
*The only bit of advice I'd offer is to exit any short immediately if/when the stop is hit because you'll get called pretty quickly on this stock during a shortened week. The key is to maintain a short position for as long as humanely possible.
OPTIONS: Before doing anything, read the *asterisk directly above here in the Equity section. While it doesn't affect you in the same way, if you end up buying contracts that expire too soon, you will want to roll them over ASAP if the stop gets triggered early in the week. Same reasoning as above.
STRIKE: { $37 - $39 }
EXPIRATION: February 19th, 2021
REASONING: The contracts are pricey because nobody is sane enough to write these without getting a serious premium. Luckily, 37 - 39 strikes are just as probable as 40+ and are therefore the optimal deal for this particular expiration. There isn't a better combination of moneyness, gamma upside, vega upside and theta decay.
JMIA, I wish you good luck in the coming months. Many things are not-so-subtely screaming that you will need it.
i.e. even the Motley Fool is publically bearish.
- African Swine
JMIA
SPX
CURRENCYCOM:US500
NDX
DJI
If you've already heard of Jumia, then you probably don't need to read any of this - just know that it is a technical sell at the moment.
If you haven't heard of Jumia, then you're in for a treat. This ticker has been pumped by bulls and bears alike, sporting the title of "Amazon of Africa." Let me tell you, it is not. In fact, I've put together a Top-6 list of reasons why one should not hold this stock.
Ready?
1) It is not the Amazon of any continent; I would say that at best, it could pass for being the Stamps.com of certain small Caribbean municipalities. Maybe.
2) It's so very far from being profitable, let alone beating top-line estimates. See any financial report throughout its public existence.
3) There is a constant buzz surrounding the soundness of its financial statements. What I mean is that at least some people are spreading the rumor of fraud, which is almost worse than actual fraud. Definitely worse than declaring bankruptcy (Hertz, cough).
4) Wouldn't be shocked to see them declare bankruptcy by 2022.
5) The business model is predicated on the increased consumerism of African nations. Consumerism is an American-only kinda thing. Like, America can do this because it owns the global reserve currency. Africa may or may not increase its consumer-like tendencies at some point, but probably not during this pandemic. Or within the next 5 years hereafter.
6) The technical setup is such that there is very little room to the upside without making a new high. Since the downtrend is clearly impulsive and the uptrend is clearly corrective, the bias toward the next leg down is overwhelmingly probable at this juncture. If it makes a new high, just hold the short/puts because we're going to see a very common "irregular/expanded flat" correction which will end up overshooting to the downside in no time - should a new high be made.
Essentially, the only way you will lose here is if you buy puts that expire too soon. Hence, don't do that.
PIGGISH SPECS:
EQUITY: May be on the "hard to borrow list," which will make it difficult to locate shares that can be shorted without incurring a steep borrowing fee. This play is far more suited for Options anyway, but if you insist on shorting this the old-fashioned way, then take a look at the STOP-ENTRY-PROFIT-ZONE region on the right-hand side.
*The only bit of advice I'd offer is to exit any short immediately if/when the stop is hit because you'll get called pretty quickly on this stock during a shortened week. The key is to maintain a short position for as long as humanely possible.
OPTIONS: Before doing anything, read the *asterisk directly above here in the Equity section. While it doesn't affect you in the same way, if you end up buying contracts that expire too soon, you will want to roll them over ASAP if the stop gets triggered early in the week. Same reasoning as above.
STRIKE: { $37 - $39 }
EXPIRATION: February 19th, 2021
REASONING: The contracts are pricey because nobody is sane enough to write these without getting a serious premium. Luckily, 37 - 39 strikes are just as probable as 40+ and are therefore the optimal deal for this particular expiration. There isn't a better combination of moneyness, gamma upside, vega upside and theta decay.
JMIA, I wish you good luck in the coming months. Many things are not-so-subtely screaming that you will need it.
i.e. even the Motley Fool is publically bearish.
- African Swine
JMIASPXCURRENCYCOM:US500
NDXDJI交易進行
Question for anybody:Im watching the tape now and something just happened. Anyone know if they just did a shelf offering or something similar?
I think the number of outstanding shares just changed, but have no idea since im just watching it on the back end. Any confirmation would be dope.
Thanks.
交易進行
Last chance to get a short/put position before its a) proven to be a long (unlikely) or b) trading under 39 for the foreseeable future.交易進行
Waiting for Russ 2000 to hit its seemingly inevitable high around 2120 until I double my put position in JMIA.Keep an eye on Russ above 2100 for a potential second entry. The thought that JMIA has cracked this much while the small caps defy gravity + logic is a very promising sign indeed.
GL and dont get trapped here (bulls).
交易進行
on second thought, Im going to add that position right now in case the russell is forming a blow off top atm.even though its less likely, i find it riskier to wait for a potential higher high before entering, in this case.
交易進行
adding another 50% 37 feb puts, even though the small cap blow off top should let us see sub 30 sooner than later.交易進行
Jumia, Whats up dude?
Dont think i forgot about you. In fact, I'm writing to you to say that i just picked up 50 of your put options for 2/19 @ 45 strike.
Its just that I think you won't be lasting above 40 up until your ER and I dont want to pay unnecessary premiums for information that I already know; your numbers are bad. Again.
-PermaPig
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