Retail traders are doubling and tripling down on Tesla and Nvidia
Tesla’s sales are falling all over the world. The stock is following suit, recently breaking down below its 200-day moving average for the first time since August.
Nvidia has traded the same way, if not worse, even though its fundamentals haven’t shown anywhere near as much deterioration.
Yet, retail traders remain undaunted.
“Retail investors returned as aggressive buyers on Wednesday, breaking the $2 billion threshold in the first half of the day (the 2nd time this year), and ending the day at $3.7 billion inflows (+7z),” JPMorgan strategists led by Bram Kaplan wrote. “We observed their allocation into ETFs/single names are at 30/70% during a typical heavy buying day. Among single names, NVDA and TSLA led the inflows.”
That +7z means net flows from retail traders were a whopping seven standard deviations above their 12-month average.
“Among single names, their interest in short-dated TSLA calls has increased, consistent with their directional tilt in the cash market,” they added.
To adapt Marilyn Monroe, I guess if you don’t love me below my 200-day moving average, you don’t deserve me at my 52-week high.
