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Last week, I wrote about Advanced Micro Devices (AMD - Free Report) as the Bull of the Day after another stellar earnings report and guidance handed my followers big new-high gains above $95.
As a long-time investor in bigger peer NVIDIA (NVDA - Free Report) , I talked about how I finally became an AMD fan last summer when they stunned the semiconductor world with Intel-clobbering advances in all product segments. Here's what I wrote last week...
I became convinced about buying AMD pullbacks a year ago in July after the stock broke-out strongly from a consolidation around $55. The catalyst was another advance in the PC wars against rival Intel. I covered that in this article and video...
I also expanded my knowledge of how the little gaming chip company had undergone an "advanced" semiconductor revolution in the past six years under the leadership of Taiwan-born engineer Lisa Su. Early in her career, Su worked at Texas Instruments, IBM, and Freescale Semiconductor in engineering and management positions.
(end of excerpt from AMD: Bull of the Day)
One part of the story I left out was what happened on that fateful day of July 24, 2020: while INTC shares dropped 16%, AMD surged an equal amount on a massive 205 million shares.
The reason I bring that up now is to highlight the volume we are seeing in AMD in the past week. In the video that accompanies this article, I show the price chart with volume and what you see looks like this...
28 July: 140M shares 29 July: 164M shares 30 July: 125M shares 02 Aug: 115M shares 03 Aug: 158M shares 04 Aug: 181M shares (as I type with 2 hours to go till the closing bell!)
For perspective, the average daily volume for AMD is somewhere in the neighborhood of only 60 million shares. This is double and triple volume every day for six days straight!
So this ramp as the stock ascends to $120 today -- partly off of yesterday's press release that AMD is providing the Radeon Pro W6000X series GPUs for the Apple Mac Pro -- is a combination of institutions who ignored AMD stock at $80 for the past year and short-sellers who simply had no idea what they were doing.
The new AMD product line, which includes Radeon Pro W6800X and Pro W6900X, is built on AMD RDNA 2 architecture and AMD Infinity Cache, among other technologies.
AMD Good, AMC Bad
As you may know, I like to have some fun when I write about stocks and share good research. My first priority is the research and helping my followers buy good stocks and stay with them. Once I've done that, we can have a few laughs.
And one of the best places for laughs lately is the StockTwits message board for AMC Entertainment (AMC - Free Report) , where an army of apes believes they are going to teach hedge funds a lesson and get rich as the stock goes to $1,000... or was it $100,000?
All year, I've tried to tell them that "there are no armies in trading." It's just you, your capital, your risk/reward management, and your mental discipline against the market. One of my biggest and sincere concerns is that the "ape army" philosophy is seductive and damaging to inexperienced traders who might believe all the revolutionary fervor and prophecy.
The MOASS (mother of all short squeezes) is a fun idea, but it is not a reliable trading strategy. When it ends, it will end badly for many small traders.
Besides, you don't really know who is selling when all you see are 300 messages per minute fly by about how "WE ARE WINNING BECAUSE WE ARE NEVER SELLING!!" (rocket emoji, ape emoji, moon emoji, etc)
In June, I made one last appeal to common sense and decency with AMC FUD Runneth Over: Panic at the Casino! to persuade folks to let go of the fantasy of reforming Wall Street and just focus on becoming better investors and traders with stocks like AMD.
The apes all respond that I must be getting paid by Citadel to keep AMC down. But really, I was trying to help them get paid!
You could have still bought AMD near $80 and sold AMC near $60 on June 21. Now one is up +35% and the other is down -40%. I'll let you guess which is which.
NVDA and SQ: Always Buy, Never Sell
In the spirt of good humor, I will admit that even I sometimes get a little fanatical about my favorite stocks. I discuss two more of them in the video, explaining first why NVDA should have gone down today, but it did not. Which is wonderful. The news this morning was that UK regulators might block Jensen Huang's proposed $40 billion buyout of Arm Holdings. Get the details in the video.
And for Square (SQ - Free Report) , I went back to my research notes and explained why the "Apple of FinTech" just keeps getting better and stronger at providing a rich ecosystem of services and tools for the small business person. It's really a wonder to behold what Jack Dorsey is doing and why.
Be sure to watch the video to learn why I call Square "Jamie Dimon's Favorite Mistake."
A Quick Stroll Through the Reddit Rabbit Neighborhood
To wrap up my quick tour through some of the best stocks in my neighborhood, I also took a look at a more controversial investment choice, namely Robinhood (HOOD - Free Report) .
The stock soared as much as 80% this morning to $85 and we don't know all the details yet as to why -- except that Cathie Wood's ARK Invest has been buying every day since the IPO late last week.
But part of the story is that the WallStreetBets Reddit crowd was a collective hater of the IPO for obvious reasons involving PFOF (payment for order flow) and other conspiratorial shenanigans with hedge funds like Citadel to keep AMC stock down.
If the wascally wabbit-hole bettors were encouraging their armies to be short HOOD, twas a very "steal from the poor and give to the rich" sort of thing to do, especially as the shares head back to $70 while I type at 2:30 ET on Wednesday. I don't know. Maybe WSB-ers were buyers of the HOOD.
But another angle from one of my options pros, Dave Borun, is that since options started trading today on HOOD and the retail crowd is out there euphorically buying high-strike, out-of-the-money calls, market makers had to buy up the shares at any price to cover their risk.
He said there are virtually no shares available to borrow which means nobody can really short the stock and keep a lid on the insanity. So the 70-strike calls, as the highest available strike on the board, had an insane implied volatility of 250%.
I can't wait to hear all the stories behind the stories soon. But one cool thing I didn't know is that Robinhood account holders had a chance to buy shares pre-IPO.
Square did that too and my family took full advantage. It's especially smart for the swashbuckling new broker because they now have a richer class of clientele who will sell some shares and buy more of other stocks in their accounts. The pure genius of merry pranksters.
Disclosure: I own AMD, NVDA, and SQ for the Zacks TAZR Trader portfolio.
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Stocks in My Hood: AMD, SQ, NVDA
Last week, I wrote about Advanced Micro Devices (AMD - Free Report) as the Bull of the Day after another stellar earnings report and guidance handed my followers big new-high gains above $95.
As a long-time investor in bigger peer NVIDIA (NVDA - Free Report) , I talked about how I finally became an AMD fan last summer when they stunned the semiconductor world with Intel-clobbering advances in all product segments. Here's what I wrote last week...
I became convinced about buying AMD pullbacks a year ago in July after the stock broke-out strongly from a consolidation around $55. The catalyst was another advance in the PC wars against rival Intel. I covered that in this article and video...
Release the Ryzen! AMD Roars in the Nanometer Wars
I also expanded my knowledge of how the little gaming chip company had undergone an "advanced" semiconductor revolution in the past six years under the leadership of Taiwan-born engineer Lisa Su. Early in her career, Su worked at Texas Instruments, IBM, and Freescale Semiconductor in engineering and management positions.
(end of excerpt from AMD: Bull of the Day)
One part of the story I left out was what happened on that fateful day of July 24, 2020: while INTC shares dropped 16%, AMD surged an equal amount on a massive 205 million shares.
The reason I bring that up now is to highlight the volume we are seeing in AMD in the past week. In the video that accompanies this article, I show the price chart with volume and what you see looks like this...
28 July: 140M shares
29 July: 164M shares
30 July: 125M shares
02 Aug: 115M shares
03 Aug: 158M shares
04 Aug: 181M shares (as I type with 2 hours to go till the closing bell!)
For perspective, the average daily volume for AMD is somewhere in the neighborhood of only 60 million shares. This is double and triple volume every day for six days straight!
So this ramp as the stock ascends to $120 today -- partly off of yesterday's press release that AMD is providing the Radeon Pro W6000X series GPUs for the Apple Mac Pro -- is a combination of institutions who ignored AMD stock at $80 for the past year and short-sellers who simply had no idea what they were doing.
The new AMD product line, which includes Radeon Pro W6800X and Pro W6900X, is built on AMD RDNA 2 architecture and AMD Infinity Cache, among other technologies.
AMD Good, AMC Bad
As you may know, I like to have some fun when I write about stocks and share good research. My first priority is the research and helping my followers buy good stocks and stay with them. Once I've done that, we can have a few laughs.
And one of the best places for laughs lately is the StockTwits message board for AMC Entertainment (AMC - Free Report) , where an army of apes believes they are going to teach hedge funds a lesson and get rich as the stock goes to $1,000... or was it $100,000?
All year, I've tried to tell them that "there are no armies in trading." It's just you, your capital, your risk/reward management, and your mental discipline against the market. One of my biggest and sincere concerns is that the "ape army" philosophy is seductive and damaging to inexperienced traders who might believe all the revolutionary fervor and prophecy.
The MOASS (mother of all short squeezes) is a fun idea, but it is not a reliable trading strategy. When it ends, it will end badly for many small traders.
Besides, you don't really know who is selling when all you see are 300 messages per minute fly by about how "WE ARE WINNING BECAUSE WE ARE NEVER SELLING!!" (rocket emoji, ape emoji, moon emoji, etc)
In June, I made one last appeal to common sense and decency with AMC FUD Runneth Over: Panic at the Casino! to persuade folks to let go of the fantasy of reforming Wall Street and just focus on becoming better investors and traders with stocks like AMD.
The apes all respond that I must be getting paid by Citadel to keep AMC down. But really, I was trying to help them get paid!
You could have still bought AMD near $80 and sold AMC near $60 on June 21. Now one is up +35% and the other is down -40%. I'll let you guess which is which.
NVDA and SQ: Always Buy, Never Sell
In the spirt of good humor, I will admit that even I sometimes get a little fanatical about my favorite stocks. I discuss two more of them in the video, explaining first why NVDA should have gone down today, but it did not. Which is wonderful. The news this morning was that UK regulators might block Jensen Huang's proposed $40 billion buyout of Arm Holdings. Get the details in the video.
And for Square (SQ - Free Report) , I went back to my research notes and explained why the "Apple of FinTech" just keeps getting better and stronger at providing a rich ecosystem of services and tools for the small business person. It's really a wonder to behold what Jack Dorsey is doing and why.
Be sure to watch the video to learn why I call Square "Jamie Dimon's Favorite Mistake."
A Quick Stroll Through the Reddit Rabbit Neighborhood
To wrap up my quick tour through some of the best stocks in my neighborhood, I also took a look at a more controversial investment choice, namely Robinhood (HOOD - Free Report) .
The stock soared as much as 80% this morning to $85 and we don't know all the details yet as to why -- except that Cathie Wood's ARK Invest has been buying every day since the IPO late last week.
But part of the story is that the WallStreetBets Reddit crowd was a collective hater of the IPO for obvious reasons involving PFOF (payment for order flow) and other conspiratorial shenanigans with hedge funds like Citadel to keep AMC stock down.
If the wascally wabbit-hole bettors were encouraging their armies to be short HOOD, twas a very "steal from the poor and give to the rich" sort of thing to do, especially as the shares head back to $70 while I type at 2:30 ET on Wednesday. I don't know. Maybe WSB-ers were buyers of the HOOD.
But another angle from one of my options pros, Dave Borun, is that since options started trading today on HOOD and the retail crowd is out there euphorically buying high-strike, out-of-the-money calls, market makers had to buy up the shares at any price to cover their risk.
He said there are virtually no shares available to borrow which means nobody can really short the stock and keep a lid on the insanity. So the 70-strike calls, as the highest available strike on the board, had an insane implied volatility of 250%.
I can't wait to hear all the stories behind the stories soon. But one cool thing I didn't know is that Robinhood account holders had a chance to buy shares pre-IPO.
Square did that too and my family took full advantage. It's especially smart for the swashbuckling new broker because they now have a richer class of clientele who will sell some shares and buy more of other stocks in their accounts. The pure genius of merry pranksters.
Disclosure: I own AMD, NVDA, and SQ for the Zacks TAZR Trader portfolio.