Nonfungible tokens (NFTs) are hot right now.
Not surprisingly, 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.
Why? As NFT stocks have blown up, corporate Wallstreet has taken notice. With the increased exposure have 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.
One approach to diversifying your portfolio would be to short-sell these stocks as current price changes have become somewhat predictable. That is, after a very strong day, 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.
I know successful traders that pick one or a couple of NFT stocks with unusually high trading volume (> 1 million shares traded that day) to focus on. These traders play both sides - they buy low and sell high on the long side, and short-sell at the peak price when they expect a price drop. Sometimes these traders make multiple or a dozen or more such trades on one stock just in a day, playing both sides as they go.
Below, I provide 32 NFT stocks and tickers and data for them from Friday, April 30th. The stocks are listed from the biggest loss as a percentage change in price for Friday, April 30th at the top (TKAT), to the stocks with the biggest daily gains at the bottom (TRW).
In the columns, take note of the company name, stock ticker, 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 April 30th (% change), the stock price at Friday's Open (Open), the Closing price for the stock on the previous day (April 29th) (prev close), the high price for the stock on April 30th (High), the low price for the stock on April 29th (Low), Volume of shares traded on April 29th (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.
TKAT is a great example of a stock that saw very heavy volume and for which the day-trading approach of playing both sides would have worked great. It bounced up and down all day, with a wide range. Its low price of the day was ~ $31, and the high of the day exceeded $39. TKAT is a get-in, and get-out NFT stock type play. Others are more established players making NFTs a side project, e.g., Hasbro, orFunko. Other stocks like MUDS have emerged only in the last month (as a SPAC, Special Purpose Acquisition Company) in partnership with Topps to make NFT sports trading cards. Still, others like Wisekey (WKEY) are seemingly pure NFT plays.
My feeling is that at present, 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. Thus, this period presents a good opportunity to short-sell, or day-trade these stocks.
This is not financial advice. May all your days be green and good luck out there.
