GRUB (GrubHub Inc) offers an objective short entry on this bearish rising wedge breakdown following the 3rd divergent high since mid-2017, with the previous two divergent highs followed by corrections of ~14 & 15%. The sole price target at this time is T1 at 95.12 with a decent likelihood of one or more additional targets to be added, depending on how the charts develop going forward.
GRUB daily June 22nd
The suggested stop for this trade is any move above 117.50 with a suggested beta-adjusted position size of 1.0. With GRUB only trading slightly below the rising wedge pattern, one could wait for a solid move and/or candlestick close below the wedge (white uptrend line) before establishing a position but from the look of the charts of GRUB, IWM & QQQ, my guess is that this stock has a decent chance of gapping down on Monday & if so, that might deny an objective entry.
GRUB is the largest component of IWM (Russell 2000 Small Cap Index) although the $RUT not a top-heavy weighted index like the $NDX. GRUB only accounts for a 0.41% weighting with the next three largest components weighted at 0.40, 0.40 & 0.37%.
I mention this as IWM is under consideration for another official short trade, possibly as early as today or next week. As the largest component of IWM, GRUB is likely to have a high-correlation with IWM which should be factored into one’s position size if they plan to take positions in both.
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