On Friday, I joined Kelly Evans on CNBC The Exchange to discuss options expiration Friday, the pullback in NVDA along with potential buy levels, the drop in GameStop, and more.
The current upmove in the Nasdaq has been phenomenal, however, it’s already made multiple upside targets, along with the majority of its top-weighted stocks. Microsoft, Nvidia, Alphabet, Broadcom, Netflix, and more have made my short-term targets. This means that typically we take profits and wait for a pullback to enter along with the trend.
There are a few stocks that are already pulled back at entry points, including SPOT, AMD, DELL, PANW, and META.
However, NVDA and AVGO specifically have dropped quite a bit after making the $140 and $1850 price targets. This can be a red flag that the semis are starting to shift, and that shift can bleed into the rest of mega-cap tech.
As such, I’m eyeing pullback zones to buy along with the trend, as volume drops out of the market for summertime and the indexes set up going into earnings season in July.
As far as GME is concerned, the $20 calls were, at one point, going for more than $27 a contract, and as of today, are only worth about $4. The best time to get out of a short squeeze is when it loses momentum, and breaks the low of the high bar. Waiting until the day of options expiration means that you lose the gift of time, and aren’t able to capitalize on the percentage gains that were. Once a short squeeze is dead, it takes another round of consolidation and then a new catalyst to start again. Which, I don’t anticipate happening for a while at this point.
