Nonfungible tokens (NFTs) are hot right now, but the stocks for them, maybe not so much.
Many publicly traded companies have emerged as players in NFTs and related spaces. In recent weeks some NFT related stocks have boomed and some have crashed back to Earth.
For some NFT stocks, the boom-bust cycling now seems like an almost daily, or intra-day occurrence. However, money shifts around on Wall Street and among "hot" sectors," and right now it seems NFT stocks are cold.
Why? Corporate Wallstreet has taken notice. With the increased exposure has likely come short-sellers.
On Friday, April 30th, at market close, 25 of 32 NFT related stocks I watch were red (lost value) or neutral. A few gained in after-hours trading, but mostly, they were red. A handful dropped more than 5% and some more than 10-17% on the day. The same thing happened today, Monday, May 3. 25 of 32 stocks in the red, some as deep as > -18% losses on the day and at least 12 > 5% losses.
One approach would be to short-sell. That is, after a very strong day, or weeks, or after a few hours of a price pumping up, the price of an NFT stock will often come down to some bottom-level of resistance.
Another approach, with for example a stock like TAPM that just had a negative 18% day (see Table below), would be to look for its lower support price level and take a buy position on a bounce play. The bounce could happen the next day or in the next week.
The idea here, with either a short sell or long position day trade is to get in and get out. Pick one or a couple of NFT stocks with unusually high trading volume (> 1 million shares traded that day) to focus on, the low volume stocks can get rug pulled at any time.
In the figure below, you can see some of the daily losses for 32 NFT related stocks I follow on Monday, May 3rd. 25 finished the day red. A couple gained a little back in after-hours trading but still were overall in the red.
Caption for the figure/table below: In the columns, take note of the company name, stock ticker, the current stock price (price), +/- % change in stock price during after-hours trading (after hours), +/- $ change in stock price for the day (change), % change in a stock price for the day of May 3 (% change), the stock price at Friday's Open (Open), the Closing price for the stock on the previous day (April 30th) (prev close), the high price for the stock on May 3 (High), the low price for the stock on May 3 (Low), Volume of shares traded on May 3 (Volume), % Range which is the range in terms of a percent that the stock traded from it's daily low to it's daily high, and finally the Market Cap.
Stocks to day trade stock should see very heavy volume, with a wide range.One good example is TKAT on row 4 of the table above. Over the last week this has been heavily day-traded.
My feeling is that stock market money, especially day-trader money, is rotating to another sector, at least for the short term.
It's likely this buying pressure will come back around, and when that happens prices will trend upward consistently.
For now, as money shifts into other sectors expect corrections to NFT stock prices that have run quite a bit over recent weeks.
This is not financial advice. May all your days be green and good luck out there.