$Duolingo(DUOL.US) yesterday showed a classic pattern of major players shaking out weak hands, a squeeze and accumulation move. It's a good sign that there are signals of major players building positions, but it doesn't mean an immediate upward attack will start. Major capital building positions could take months or even longer. It's even possible that if there are short-term negative catalysts, it could turn into distribution. As the saying goes, when playing Duolingo, one must always be mentally prepared for it to go to 7.80. But as a company with stable profits, ample cash flow, and still relatively fast growth, I see no reason for it to go bankrupt and be delisted.

If there is positive news around the earnings report, it might surge. Friends playing the short-term game can pay attention to the 125 level. From the options structure, this is also a short-term resistance level. If it closes above 125 with high volume around the earnings report, it can be seen as a sign of an upward breakout; otherwise, consider it as range-bound monkeying around. 🐒

If you are a long-term value investor, you only need to consider the valuation. Keep a good margin of safety. In my view, Duolingo is worth at least 200, so now it's just a difference of picking up a 200 at a 30% discount or picking up a 200 at a 50% discount. 😄