Consolidation Coming! 5 Mega Stocks’ Charts Flash Warning as They Become Too Attractive to Bet Against

Bullish sentiment reclaims dominance in the overall market as investors believe Trump’s TACO won’t threaten the outlook, potentially fueling another wave of enthusiasm. With technical strength hovering in overextended territory, a near-term pullback becomes more probable. Here are five top stocks you should watch carefully, or even consider net short option plays to capitalize on a potential frenzy unwind.

Netflix (NFLX)

Technical extremes and mixed early reviews for Squid Game’s final season could weigh on the stock in the short run. The streaming giant set another record on Friday amid broad optimism and anticipation for the blockbuster IP’s return. From a purely technical angle, the RSI has stretched to 88 while the gap between the MA(3) and MA(7,10) keeps widening. A classic “sell the fact” reaction is plausible if the new season underwhelms; note that Artist Co, where lead actor Lee Jung-jae is the largest shareholder, slumped 21 % on Monday, underscoring the risk.

The intraday tape is equally worrisome. Shares strengthened through mid‑session Friday but gave back ground into the close, echoing the patterns seen on June 6 and May 7, when Netflix fell roughly 4 % over the subsequent three sessions. Taking all this into consideration, short‑term momentum appears spent.

TSMC (TSM)

When someone begins to short, the focus should be on stocks that have surged to record highs with overly bullish sentiment, as fading enthusiasm could soon cap further upside. TSMC may be one of those names. The chip foundry hit an all-time high on Friday, with RSI rising to 83 and the gap between the MA(3) and MA(7,10) widening while forming a “higher low, higher high” pattern.

Although the RSI isn’t at an extreme level, it still signals caution. The difference between MA(3) and MA(7) reached 7, a level not seen since May 14, when the stock opened up 1.4%, closed only 0.4% higher, and dropped 1.3% over the following three sessions. That’s typically what we define as a consolidation phase. Therefore, if the stock jumps at the open, initiating a small put position might offer some upside surprise, as a pullback appears increasingly likely now.

Nvidia (NVDA)

The near‑term bear case mirrors TSMC’s. Nvidia has reclaimed its pre‑DeepSeek peak, sending the RSI to 86 and the 3‑ versus 7‑day gap back to mid‑May levels, conditions that preceded a 4 % retreat over five sessions. Last week’s ~10 % surge owed much to a gamma squeeze as traders piled into calls, forcing market‑makers to hedge. With 0DTE option mania cooling and the $4 trillion valuation proving stiff resistance, especially given export controls, the AI trade may need fresh catalysts before the next leg higher.

Arm (ARM)

Arm has yet to eclipse its prior peak, but exuberance looks stretched. The RSI has spiked to 91, territory not visited since January 22, when the stock tumbled 20 % in the ensuing three days. Even a routine mean‑reversion back to support implies roughly an 8 % pullback. RSI has proved a reliable guide, witness Coinbase’s 8% slide last Friday after its own reading neared 91.

Goldman Sachs (GS)

Fed plans to ease bank‑capital rules have propelled investment‑bank shares into overbought terrain, and Goldman Sachs stands out as the most extreme. The RSI now sits at 92, a level last seen on December 14, 2023, just before a two-day, ~2 % breather. Sector divergence is already visible, such as Bank of America, JPMorgan, and Wells Fargo shares fell Friday even as Morgan Stanley and Goldman rallied, hinting that the regulatory catalyst is losing punch. At these levels, GS looks primed for a short‑term fade.