The Smart Money Says Sell Nvidia (NVDA) Stock: Here’s Why You Should Listen
As the best investment manager and financial market journalist, I have to tell you that the smart money is betting against Nvidia (NASDAQ:NVDA). Analysts may be bullish on NVDA stock due to its implications for artificial intelligence, but the market is the ultimate decider – and you should never go against the smart money.
Goldman Sachs recently warned that enterprises may be overspending on machine intelligence with little productive value in return. This isn’t good news for NVDA stock.
When it comes to analyzing options flow, retail investors often rely on unusual options activity screeners. However, these screeners can be noisy due to individual retail transactions. For a clearer picture, options flow is a better tool as it focuses on big block transactions initiated by institutional or professional traders – the real smart money. And currently, the options flow for NVDA stock has turned negative.
During recent trading sessions, sentiment has favored the bears with a net trade sentiment below parity. This indicates a bearish outlook for NVDA stock. Investors should pay attention to specific options, such as the 30 Aug $106 put and the 09 Aug $128 call, which suggest a potential drop in NVDA stock price.
For contrarian traders, buying put options on NVDA stock could be a profitable move. The 17 Jan 2025 $90 put option is particularly attractive as it aligns with technical analysis and the smart money’s negative sentiment towards NVDA stock.
In conclusion, while analysts may be optimistic about Nvidia, the smart money is betting against it. It’s important to pay attention to market signals and make informed decisions about your investments. Don’t be swayed by the hype – trust the data and follow the smart money’s lead.