ContextLogic's Stock Squeezes: What Does The Chart Say?

ContextLogic Inc WISH was trading over 9% higher at one point Friday after breaking bullish from a 13-day consolidation pattern. Prior to consolidating, the stock skyrocketed 93% over the course of three trading days amid both heightened retail and institutional interest.

The stock is popular in a number of Reddit communities but on June 15, a day ContextLogic had relatively low trading volume and only moved about 4% intraday, an institution made a massive block trade totaling 11.32 million. On Friday, the 1,000 shares the institution purchased at $11.32 per share would be worth almost $12 million, an almost $700,000 gain in only five trading days.

That trader may be waiting for higher prices to start piecing off their gains and the chart looks like the stock could fly.

The ContextLogic Chart: ContextLogic's stock broke up from a symmetrical triangle it had been trading in since reaching a high of $15 on June 9. Between then and June 17 the stock’s daily trading range had been tightening, and its volume dropping, indicating a big move in the stock was on the horizon. The move higher, however, slammed the stock into an upper resistance level at the $12 area and Context Logic began to consolidate under it on lower timeframes.

ContextLogic is trading above the eight-day and 21-day exponential moving averages, with the eight-day EMA trending above the 21-day EMA, both of which are good signs for the bulls. On the other hand, the stock is trading about 25% under the 200-day simple moving average, which indicates overall sentiment in the stock is bearish and Context Logic bulls have some work to do to regain that level as support.

Bulls want to see Context Logic's stock pop over resistance just under $12 for the level to become support. If it can make a close, on the daily chart, above the level it has room to move back up toward $13.62.

Bears want to see Context Logic continue to reject its upper resistance level and for it to trade back down toward its lower support near the $10 level. If Context Logic's stock were to fall below $10 it could trade down to $8.60 before potentially bouncing.

WISH Price Action: Context Logic was trading up 0.5% at $11.29 at publication time.