Here’s my take on $NVDA and another stock or two – August 22, 2023
This is Dan Fitzpatrick at StockMarketMentor.com, and your Fitz in Five.
I was actually going to do a video on a few other stocks that I am looking at, such as Boeing ( NYSE: BA ), it’s starting to look pretty good, nobody cares about that, that’s for sure. Look at BioNTech ( NASDAQ: BNTX ), which we took a position in today. I was going to look at that, I think that this stock is making a monster move.
You can see here on the weekly chart, this has been a pretty prolonged base here for a while. The stock is coming up against the 200-day moving average and that is likely to form some kind of resistance here, and that is all well and good. But what is another 5 percent above where it is now? It has got some monstrous momentum here over the last couple of days. So I think of all the COVID crazy stocks this is probably the one that has the most potential.
You can look at Pfizer ( NYSE: PFE ), whose headquarters is clearly the death star. You can look at Moderna ( NASDAQ: MRNA ), which has had a heck of a move. It just seems to me, because this went out of a squeeze the wrong way and so now it is back up here, that’s fine, but it is already like a 21 percent move.
When I look at BioNTech ( NASDAQ: BNTX ), it is just coming from a better place. It’s a tight base, this was really just a fake-out, and about one-third of all volatility squeezes do tend to be fake-outs. They run big the one way and then they go the other way, so that is what we are seeing here. We’ve got NVS ( NYSE: NVS ), which could be moving one way or another. Johnson & Johnson ( NYSE: JNJ ) is not an issue here at all.
So the bottom line is, we are going COVID crazy again. As I understand it, everybody has got to start wearing a mask again, even when you go down to the drugstore to get your latest booster. Don’t forget to get your flu shot too, it is very important to get vaxxed for all of this stuff, it’s just the thing to do. That’s the only way companies like Pfizer ( NYSE: PFE ) are going to continue to make their billions (I am definitely being sarcastic).
So I was going to talk about BioNTech ( NASDAQ: BNTX ). Again, I have a position, I am looking for $130.00, and I’ll figure it out from there. But instead of talking about all this stuff, let’s talk about NVIDIA ( NASDAQ: NVDA ) since that is what everybody wants to talk about.
The way the Options Market is looking now, it is implying essentially, like, a $50.00 move one way or another, give or take after a while. So the box here, where the stock could be in, is over $100.00 wide so this is a big potential swing that the Options Market is looking at.
I don’t look at today as anything other than just kind of some repositioning. Everybody got all lathered up yesterday, a big move higher on massive volume. Today a gap up, where I think a lot of people, myself included, were saying, Do you know what? I think maybe let’s just take some profits and sit back and regroup here before the big day, Wednesday.
And so that is really what I see going on here. The more important chart, to me, is the weekly chart. We are up at this all-time high here. And personally, I think this stock is set for a fall. A big fall, I don’t think so. But just as a function of how much it has gone, I think that the stock is set for a fall.
However, this is important. You can say, Well Dan, you are copping out. No, I am just telling you the truth here. What I don’t know is, if the stock is going to fall from 500.00 or 510.00, everybody gets all amped-up because the numbers were so awesome, and so then the stock gaps up and then it falls.
But I seriously doubt that in the case of an upside move, I seriously doubt that the stock is going to give you a gap and run. To where it just gaps up, and this thing could easily gap up to $500.00, we still have another trading day left so all of this is subject to change over the next 24 hours.
But we could see the stock gap up and then keep going. But how much farther would it go before traders just started rotating out of the position simply as a function of, it’s time to take profits? I am staying away from NVIDIA ( NASDAQ: NVDA ) right now.
I am considering putting on a volatility compression-type trade. Where I sell a far-out-of-the-money bear call spread and a far-out-of-the-money bull put spread. But I am not going to say anything now because I have got to wait and see how things shape up tomorrow afternoon.
My suggestion to you, from a stock trading standpoint is, why gamble? If you’ve got a big huge profit in this stock then go ahead and keep it and you’re fine. The stock could go down to 400.00, and if that is okay with you, then you are good.
But if that would be a problem for you then go ahead and take some off the table. Take it all, take half, do something or other. But as far as getting in there and gambling, that’s really what it is. I have seen a lot of traders go bust from taking a big gamble, Oh I know, I’ve got a feeling about this, I’ve got a feeling about this.
Well, you don’t get paid to have feelings. You need to be focusing on risk management. And the risk, after this kind of move higher, the risk of going into earnings with a big position is, I think, very high relative to the reward that you can get. The reward could be substantial but I just think it is a bit too risky for you to be doing that.
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