SNDK at $1275, do you dare to catch it?
SNDK at 1275, the weekend perpetual contract has already hit the previous short target, but the underlying stock hasn't opened yet. On Monday, if it opens lower, will you catch the falling knife or get buried?
The perpetual contract has reached the previous short target zone, while the Nasdaq underlying stock hasn't opened for confirmation. In the short term, it's halfway through oversold territory; in the mid-term, it's still a deep correction within a major bull market. Before the October 29 earnings report, leverage must be reduced.
First point: Changxin Memory is about DRAM, SanDisk deals with NAND, wrong target hit.
From October 9-12, Changxin Memory announced progress on 4F² DRAM, planning to launch server memory by year-end. The memory sector was collectively hit, with SanDisk down 6% on 10/12 and continuing to fall afterward.
The NAND price increase slope is slowing. Last quarter's revenue was 8.97 billion, up 51% quarter-over-quarter, with two-thirds from price hikes, pushing gross margin to 84.6%. Next quarter's guidance changed to "shipment volume + moderate price increases," meaning price hikes are no longer the sole driver.
AI capital expenditure buyers are starting to run out of money. New cloud bonds like CoreWeave yield 15%-16%, and the market is asking: can they still borrow money to buy flash memory?
The market never crushes you because "you're wrong," but because "you're not good enough."
Second point: 1270 is others' profit-taking zone, not your bottom-fishing zone.
Previous short targets: first 1400, then 1270. The first target has been hit; the second target is right underfoot now.
From 10/16 to 10/17, long liquidations far exceeded shorts, and leverage has been cleaned out once. Funding rates have flattened near zero—this is not a position with "a big chunk of short fuel" left.
Opening new shorts? The risk-reward ratio is terrible. 1270 is where others take profits; chasing shorts here is just carrying the coffin for the bears.
Weekly RSI is 49, not fully washed out yet. The October 29 earnings report is a potential bomb; if gross margin falls from 85%, 1270 won't hold, next support at 1130, then deeper at 1000.
Third point: For the October 29 earnings, the focus isn't "whether there's profit," but "whether gross margin turns."
Company guidance: revenue 10.3-10.8 billion, adjusted gross margin 83%-85%, EPS 44-46 cents. Market expects revenue 10.6 billion, EPS 46.2 cents. Last quarter actual EPS was 39.25, about 12% above expectations.
If gross margin falls below 83%, or management admits NAND prices have flattened or declined quarter-over-quarter—1270 won't hold, next support 1130, then 1000.
If revenue and gross margin both hit the high end of guidance and price hikes continue—once 1410 is reclaimed, the previous short target becomes a short squeeze starting point, with upside to 1500.
Long vs. short showdown, judge for yourself:
On one side:
1275 is near 50% retracement at 1247, previous short target reached
Daily/4-hour RSI below 30, funding rate near zero
Underlying stock up about 790% in the past year, mid-term logic intact: Kioxia partnership, BiCS8, AI high-bandwidth flash
Analyst target price range about 1400–3600, lower bound still above current price
On the other side:
Daily moving averages in bearish alignment, price below MA7 (~1410), MA25 (~1630), MA99 (~1550)
Weekly RSI about 49, not fully washed out, more like the first meaningful correction in the main uptrend
NAND price increase slope slowing, gross margin at historical highs
October 29 earnings is a bomb, high interest rates suppress valuation and AI buyer financing
Market cap about 188 billion, PE about 17–19x, but static PE for cyclical stocks is not a safety cushion
17x PE is not a safety cushion. Cyclical stocks are cheap relative to super profits, but when super profits turn, 17x can be cut further.
Trading strategy:
1. No new shorts at current price.
1270 is others' profit-taking zone. Shorts should wait for a failed rebound: heavy volume upper shadows at 1360–1410, or a rally to 1470–1500 then rejection. Stop loss about 2% above that rebound high. Targets first 1270, then 1215; if daily close breaks below 1210, then look to 1130.
2. For rebounds, only two types of longs, no "feeling oversold" trades.
Lightly buy on pullbacks to 1215–1245 with lower shadows and no new lows. Stop loss if close or 4-hour chart breaks 1208 consecutively. First partial sell at 1305, second at 1360, remaining only after breaking above 1410 to reach 1470.
Or buy on 4-hour close above 1310, and add on pullbacks that hold above it. This confirms longs, not bottom-fishing. Stop loss below 1270.
Buying directly now, position size should be small: space to 1305 is about the same as space to 1208, risk-reward is average.
3. Reduce directional leverage before earnings.
After October 27, reduce to 1–2x or go flat. After market close on October 29, if gross margin is below 83%, or management admits NAND prices have flattened or declined quarter-over-quarter, 1270 won't hold, next support 1130, then 1000. If revenue and gross margin hit the high end of guidance and price hikes continue, once 1410 is reclaimed, previous short target becomes short squeeze start, with upside to 1500.
4. Define invalidation lines strictly.
If daily close is below 1210, 50% retracement fails, all rebound longs are invalidated, only rebound shorts remain. If daily close is above 1410 and holds, short-term bearish structure breaks, no more shorting on rallies.
Weekly RSI 49 tells you: this is not the bottom, it's halfway up the mountain.
1275 tells you: previous short target reached, but bulls haven't confirmed yet.
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