Recently, I posted the two would be a good long term pairs trade. I haven’t done anything with NVDA, but did put on a small call position on INTC with the probability I will add to it in the future.

It looks like NVDA has finally topped and their ten for one stock split takes affect, after this Friday’s close.(Haven’t researched it, but from memory it seems like the fastest actual split from the time of the announcement.)

My guess is the stock is about to head sharply lower and once it’s price is in the 100 area instead of the 1,000 price range it COULD be added to the DJIA. Guess who could come out? Possibly INTC. OR it could get in because NVDA, BUYS INTC.

History shows that for the first year or two the stocks that get added to the DJIA usually underperform the market as a whole and those removed usually outperform, at least for that first year or so after the change. Part of the reason is companies usually get added after they have outperformed and those removed are usually underperformers, so a lot of it is just mean reversion.