luckin

We have seen a potential superstar stock, luckin coffee, dropped from 20+ to as low as 3.8 yesterday. As a matter fact, this kind of Massive drop happen times after times. When everyone think this stock maybe the next XXX, most of the time, it does not meet up expectation. There is only very limited numbers of stock that will succeed in long time. In this case, why would you strong hodl a stock, thinking this is a value play? You don't even know if they are cheating you at the back.

This is why everyone should have at least a portion of the portfolio applying a simple momentum strategy. A very simple, yet effective momentum strategy could be when a price undercut a moving average, or lower than previous X bars. While it is very simple, this is actually a strategy many hf are applying (ofcourse only in some sort of more complex formula), but the general logic is very similar...