SQ, PYPL - Back on the menu

[Conqueror]

As of this morning, PYPL is trading below its May 2020 valuation, meaning all of its COVID boost is officially removed as was discussed in the following thread:

Analyzing COVID corrections PTON, ZM & DOCU

In researching coming earnings plays I decided to look at possible correlations between the drops experienced by stocks inflated by COVID and seemingly have found one: ZM drop to May 2020 valuation [image] DOCU drop to May 2020 valuation [image] PTON drop to May 2020 valuation [image] Above are PTON, DOCU & ZM. All three make up the “notable” COVID corrections and they all seem to have fallen to their May 2020 valuation. The cause of this is probably … as with all things … algos. I’d figure that when the selloffs are triggered, algo/institutional buy orders are likely congregating at this historical point of valuation. If we apply this level to CHWY, LULU & RH we get the following: CHWY potential drop to $50, a 19% drop. [image] RH potential drop to $240, a 55% drop. [image] LULU potential drop to $235, a 45% drop. [image] Keep in mind this is very much “idiot science”, but there may be something to it.

Given that PYPL is only down on some weaker forecasting and overall the business seems to be quite healthy, this may actually be close to a bottom for them on what could be somewhat of an overreaction to their earnings results. Being totally honest, most of these stocks that have these massive drops bleed heavily over the next few weeks. However, in this case I sorta feel differently about PYPL because their situation doesn’t seem to be quite as grim as companies like PTON, ZM, and DOCU.

Took a Feb 18th 140 strike call betting on somewhat of a rebound.