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LMND. This Insurance Disruptor will DOUBLE in the Next 3 Months!

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is the new and promising tech company in the insurance market. It's beyond promising; it's already a product with proven scalability and disruptive features to the aging insurance business model. Lemonade follows a creative insurance model. To understand this, consider the conventional insurance business model where companies are incentivized to NOT approve claims of their customers. That's because less money given to customers means more profits for the shareholders. This places you, the customer, and them in a constant state of dispute. It is a flawed business model. Lemonade flips that around and removes the incentive completely by introducing one simple rule. Their profit margin is fixed. They will always take 25% of what you pay. The remaining 75% will be used either to cover claims, or to be donated to a charity organization of your choice. This way, they have no incentive to deny your claim. At the same time, you have no incentive to claim more than what you think is fair because you will be reducing what goes to the charity of your choice.

On top of that, Lemonade is a tech company that employs Artificial Intelligence to manage claims. You will be surprised, and perhaps you shouldn't be, how well an AI can catch a fraudster trying to falsely claim some insurance money. This already cuts the cost by a huge margin and allows for faster growth and better scalability.

Currently, Lemonade has proven that their platform works and that it can expand. They are slowly covering more areas than just pet insurance and household insurance. They are expanding to more states in the US and countries around the world. And all of that at a minimal cost of human resource. And the brilliant thing is that the more they expand, the more data they will have to train their AI, and the more accurate and efficient the process would be. That is what disruption looks like. It's new. It flips the model around. It works. It cuts cost by a big margin. It scales. It grows before you even know it. Think Apple, Amazon, Tesla.

Now after this brief introduction, let's get into the chart. I've drawn this ascending channel a week ago and I am surprised that it is holding price this well. This shows strong demand added to the higher lows in RSI. I believe this momentum will accelerate in the coming few months. I've drawn targets based on Fibonacci of the most recent swing.

According to the channel and the Fib levels, this stock can reach $222 by 22 Feb. That's 80% gain in 48 days. I believe that in 90 days, this stock will have doubled, and by the end of the year it will have 5X'd. This is a stock to buy and hold, not a stock to trade. Good luck!

注释

I said that this stock will double in 90 days. So my target was $244 in early April. But, seeing yesterday's crazy solid green candle of 28%, I have to bring that target forward. There is even more momentum in LMND than what I expected. Now I'm making a new short-term target. I expect $184 to be support by 22 January. And $218 to be reached in 27 January. But I still don't see $244 until late February. See the following chart.

注释

It's almost a miracle how the candles are following my predicted path. But aside from my narcissistic remarks, observe the shape of the candles. They are bearish but are gapping up. There is so much strength in this stock that despite the bad market conditions in the past two days, it's coming out green. So imagine what will happen in this week or the next, seeing that market conditions are improving. This is truly a stock to hold through troubled times.

注释

OK. Bearish momentum identified. It presents a good chance to buy. More volatility means more upside later. That's because I'm long-term bullish on LMND. So such moves must be seized to add to your position. The right entry will show itself through signs of reversals. I will keep watch and let you know. I'm very keen on the potential of LMND.

注释

Bearish swing still playing out. We continue waiting for it to touch support or show a sign of reversal. The recent price increase and decrease is due to a large volume of options being sold which means the options provider needs to buy or sell LMND to hedge the sold options. This doesn't matter to us as long term investors. This is merely short-term volatility. It gives us good opportunities to add to our long term positions. I'm still of the opinion that LMND will reach $222. Timing it is proving to be hard though. My latest estimate is early April.

注释

Bullish reversal based on the following signals:
Opened gapping up.
Reversed off bottom of channel.

We need to wait for the daily close to judge. But buying now after 7% rise midday is not foolish. Generally, do not buy immediately at market open. Just wait 1 hour into market open for things to settle down a bit.

注释

The bottom of the channel is supporting price. Very good sign. We're on track.

注释

We see today's candle, red, with a wick above it as along as its body. Quite bearish of a candle, but doesn't qualify as a bearish pin bar (shooting star).
Should we worry about this bearish shaped red candle? I'd say no. You'd be surprised but I believe that next candle will be green and trading above this one. I even think it will open above today's close. I'm confident in the parallel channel and I have other reasons to attribute the bearish features of today's candle to.

交易手动结束

This is bad. There isn't enough strength to keep us inside the channel. We're not at a loss if we close now. I believe it won't go lower, so nothing really justifies closing the position. I also believe it will take a week or two before it gives us a signal of bullish momentum, which means that reaching the initial target is delayed. What justifies exiting LMND is putting your money in a better stock that also provides an insurance service, none other than TSLA.

注释

I wish this green 2 candle was solid green rather than a doji which is resisted by a known trend line. If this closes as a doji or worse as a red candle, then I don't see it breaking this resistance tomorrow. :(

注释

This trade has generally failed. LMND has not seen 2X as I predicted. It is showing a support level though and it looks like it's finding a good base there to climb from.