CoreWeave tanks as options bulls disappear

Shares of CoreWeave are tumbling on no apparent news as the AI cloud computing company gives back a chunk of ground after last week’s 25% rally.

With its 8% drop, the stock is back to levels not seen since Wednesday afternoon.

It’s a bit of a mirror image of Arista Networks, which is surging today on a massively bullish tilt in options activity. CoreWeave, an options market darling, has typically seen its put/call ratio below 0.5. As of 2:30 p.m. ET, that measure is sitting at about 0.9.

The stock’s drop is triggering a sell signal, based on the 14-day relative strength index, a measure of the strength and persistence of price moves. This calls for dumping a stock once it exits overbought territory above 70. The prudence of applying that technical metric for CoreWeave doesn’t exactly have the strongest history: this would be the sixth RSI sell signal for the stock in its short history as a publicly traded company. Shares are up more than 150% since the first one.