What just happened to NVDA?
It is 6/21/2024!!
The title of the post says it all. NVDA became the most valuable company and it got sold!! The weighting of NVDA in XLK : the technology ETF will become 20% from 6%. This announcement happens and NVDA is down.
We have to remember that Stock Market is forward looking. It means that the move happens and then invariably the news comes out that explains the move.
Ever since the 10:1 split and buyback of NVDA stock was announced, the stock kept going higher. It was 950 or so pre-split before earnings, and NVDA in 1 month from 5/22/2024 to 6/20/2024 went from 950 to 1407. This is more than 48% increase. So, when we get the news about NVDA becoming 20% of XLK, the move was already anticipated by the market as a whole and we already had the move. And we sold off yesterday in NVDA.
So, where does NVDA go? Today pre-market it is down.
NVDA goes down further and fills the gap at 126.84 and continues to go down to test the VPOC at 125.15 then we have a bounce and get to 131.14. From there we go down to fill the bigger gap at 120.99
Does all of this happen to today. I do not think so. NVDA closes at 131 to 132 level today. I think this pullback gets bought.
With monthly options expiration today, the indices are going to be choppy but we still have the Dow Jones names working nicely. As my post from a couple of days ago suggested that DOW will start to outperform.
We had Dow Jones average green yesterday while the S&P and Nasdaq were red.
Today also NKE, AMZN and CSCO, and even HON all green.
Trade of the day long is AMZN from yesterday.
AMZN to 190 today being Friday and options expiration.
NVDA back to 131-132.
So I say SPX back to 5500. This is the biggest call gamma and we should get there.
Disclaimer: This is my trading plan on the indices. This is intended to be for educational and informational purposes only. Trading is risky and loss of capital is possible. Do your due diligence. In trading, there are no guarantees. So please be careful risking capital.
Index Income Trades from Archnatrades is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.