It’s okay to make a hopeful wish now and again. But when it comes to a purchase of ContextLogic (NASDAQ:WISH) following earnings things aren’t so simple. After all, you’ll have to consider a blown candle or two on the WISH stock chart. That ultimately extinguishes any buy decisions at the moment.

Here’s why.

GameStop (NYSE:GME). AMC (NYSE:AMC). Newegg (NASDAQ:NEGG). The list goes on. Redditors: love them or hate them, they’re a fickle force that has taken Wall Street by storm in 2021.

The whirlwind gains and just as frequent breakneck damage is everywhere. Amid the scheming is WISH stock, which has enjoyed meme stock status during its brief life as a publicly traded company.

This week, all is quiet in ContextLogic with the stock’s resident ape population.

Daily WISH stock mentions stand at a hushed 38. Weekly shout-outs are a paltry 143. But a decent upswing of nearly 2,700 monthly mentions is a reminder that the monkey business in those shares may not be finished.

Most recently, this past month the e-commerce upstart stuck it to WISH stock’s bulls after a fairly awful second-quarter earnings announcement.

In brief, ContextLogic delivered a weaker-than-expected sales drop of 6% from the year-ago period, ballooning and much larger-than-forecast red ink of $111 million and rising ad costs.

Also less-than-pleasing, WISH saw a sharp decline in other key growth metrics such as app installs and average user time.

Investors didn’t pick up the pieces with a buy-the-news reaction either. They returned the goods previously purchased as WISH stock tumbled nearly 20% in the report’s aftermath to new lows.

Some blame for the dismal results could be chalked up to rebounding economic activity and businesses physically opening their doors during the quarter. But Q3 doesn’t look promising either.

Revenue at ContextLogic is off 40% through July and that’s despite a retreat back indoors on the back of forceful Covid variants entering the picture.

But there was some good news amid the bad. For example, WISH’s management attributed the current quarter’s weakness to the company reeling in its digital-ad spending as it works to improve its operations.

Still, rather than being a bull in WISH stock, I’d prefer to be a sideline investor.

WISH Stock: Weekly Price Chart

Source: Charts by TradingView

WISH shares are off nearly 80% from an all-time-high set just seven months ago. It has been ugly to say the least. And there’s little to say it can’t get worse.

Since late June when WISH briefly staged a nice-looking breakout of its punishing downtrend, the stock further compounded investors’ misery by getting sliced in half and hitting new lows.

Today, shares have formed a bearish flag pattern. Ominously, the formation has developed beneath resistance over the past few weeks following WISH stock’s earnings report.

Yet, with conditions appearing so bleak off and on the price chart, could Wish be a contrarian idea? Or is that merely wishful thinking? I don’t believe it is.

The observation is WISH’s obviously poor sentiment and decent short interest of around 9% could turn today’s flag pattern into a bear trap, which offers meaningful short-term upside in the stock.

But I wouldn’t pull the trigger on Wish just yet.

I’d demand WISH stock overcomes pattern resistance through $7.75 before considering a purchase. Secondly, stochastics need to confirm the price action with a bullish crossover.

If those conditions are met but WISH’s bearish short interest of 9% spoils, rather than fuels the bullish party, I also wouldn’t stick around for too long.

Ultimately, if the candles below the purchase price get blown out and investors refuse to exit, I think those bulls are leaving the position open to wishful thinking and little, if any, real support.

On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.