Speculative tech is on fire, and as we enter the best three-month period for equities, we’re all-in on this theme.
Following a similar path as recent winners like Peloton and Robinhood, Lovesac Co $LOVE is shaping up nicely as it breaks out of a big base.
As you can see, the stock is on the verge of completing a classic bearish-to-bullish reversal pattern.
Momentum is building, and with volatility crushed at historic lows, the setup looks primed for a pop.
We want to get long and bet on this being the start of a new uptrend.
Add a juicy 28% short interest and daunting 14x days-to-cover to the mix, and we like this one even more.
This has all the makings for a massive potential short squeeze.
There was also some very bullish unusual options activity today. We’re going to piggy-back on the exact same contracts where we saw that volume.
Here's the play:
We are buying the $LOVE 12/20 $35 calls for approximately $1.90 per contract.
A nice follow-through move out of this base should get us in the money and allow us to sell a double long before we have to worry about any theta decay.
