Who Will Be The Next Big Meme?

Hey Traders,

Well, the meme crowd got me. I am officially recanting my “AMC won’t hit $50 by Friday” statement, because, well … we all saw what happened, right?

Chart courtesy of StockCharts

And as much as I thought we’d hit peak meme this week, a closer look into the options pits makes me think twice.

Look at the trading volume on AMC’s $145-strike call. Yes, a $145-strike call on AMC. 

Now, obviously, that one finished out-of-the-money this week, but the heavy call buying at increasingly high strikes really makes me wonder if we could be looking at another squeeze headed our way …

Meme stocks are back with a vengeance, and clearly there’s still plenty of interested retail traders ready to pile on the next trend.

These meme stock rallies are relatively unprecedented. When else do you see thousands of traders piling into stocks that are cheap, beaten down, or hated without a clear catalyst in sight?

Perhaps an even better question – how are you supposed to know which stock will become the next meme name to target? 

Well, I do have a kind of “secret weapon” when it comes to sniffing out what the retail crowd is up to. My Gamma Radar, which I use as part of my Robinhood Trader program, helps me track the “energy” of specific stocks. This proprietary scanner uses order flow intelligence to spot where retail trading is getting hot, versus where institutional investors are putting their Big Money to work.

With that in mind … I’ve spotted a few names I think we could see on the meme list in the weeks ahead …

Express Train To Meme-Town?

Retailer Express Inc. (Ticker: EXPR) had a solid week, hitting a high of $6.66 on Wednesday just before its earnings report was released on Thursday. However, in spite of better-than-expected earnings, a 15 million share offering promptly popped EXPR’s bubble, and the shares weren’t able to recover their Wednesday highs into the close on Friday.

Now, EXPR has had a rough go of it, with the general struggle of being a retail stock in the 21st century compounded by the COVID lockdowns. The shares were trading for less than $1 quite a few times in 2020, so retail trader interest seems to have already pushed the retail stock significantly higher since meme mania began.

Stock courtesy of StockCharts

Looking to the pits, option prices have been exploding. While this meme stock could see a surge higher in the near-term, I will be waiting for volatility to come down, and then looking for an attractive put-buying opportunity.

Indestructible Nokia

Another potential meme target could be Nokia (Ticker: NOK). This name is already memeing, but not quite to the same extent as AMC, GameStop (Ticker: GME), or even BlackBerry (Ticker: BB).

Now, the thing about Nokia is there’s actually some decent fundamentals underlying this name. 

Its last earnings report was strong, and the shares were already rallying even before this madness began. It’s definitely seen some upside over the last week, but not the same kind of crazy pop we’ve been seeing out of other names.

Stock courtesy of StockCharts

It hasn’t yet seen a full retail trader rally this time around, and call options are attractively priced. I think this name has long-term upside so a longer-term bullish play might be in my future, although if you think this stock will get hit by meme mania in the next few weeks, there’s definitely some potential short-term plays available for relatively little initial outlay.

The Game Is RIG

With oil rallying, I think oil stocks are getting ready to light up … But so far, I’m not seeing too much recent upside action out of a lot of these oil names, in spite of ballooning oil prices.

Stock courtesy of StockCharts

A $4 oil stock makes perfect sense for traders to hop in on, and low volatility expectations are currently keeping option prices muted, presenting several potential oil plays out there. I will talk more about what I’m seeing in oil next week.

On the other side of the spectrum, green energy name FuelCell Energy (Ticker: FCEL) might also be a name to watch. The shares closed on Friday just under $10, well off their 2020 high of $29. 

But we need to keep in mind, these shares were trading at around $2 near the end of 2020. 

Chart courtesy StockCharts

Headed into earnings next week, FCEL is on the lower end of its 52-week implied volatility (IV), and call buyers seem to be piling on. 

Given the right retail interest, the shares could see renewed interest and pop higher … 

The question is when, and for how long? I want to see institutional interest in addition to retail action to convince me FCEL has long-term upside and isn’t just another trend.

Like I said, meme mania is almost impossible to predict, but my order flow intelligence scanner can help me see where hot spots are building from both institutional and retail traders. This clues me in on which stocks might actually be able to maintain a push higher, versus which stocks are likely to sink just as quickly as they soared.

These are far from my only meme speculations (as my Robinhood Traders can attest to) but just a few of the names I’m keeping an eye on as meme mania continues.

Your Only Option,

Mark Sebastian

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.