Stock of the day: Wayfair
26 June 2024
In today's stock of the day, let's revisit the situation with Wayfair, which we discussed a few days ago. At that time, the stock was forming a flag pattern within an upward channel, marked by red lines. This formation suggested a bearish breakout, and that's precisely what happened. Yesterday, Wayfair experienced a negative session from start to finish, breaking downwards out of the flag pattern.
Currently, Wayfair's price is at its monthly lows, which align with the lows seen in April. This downward breakout provides a clear sell signal, indicating a shift in sentiment to bearish. The target for this downward move is now the lows from October 2023.
The bearish sentiment is reinforced by the flag pattern's resolution, which typically indicates a continuation of the prior downtrend. Traders should note that breaking out of a flag pattern to the downside usually signals further declines. The persistent selling pressure throughout yesterday's session suggests that the bears are in control.