BE is overextended after S&P inclusion news; expect pullback/resistance near 300 as index-inclusion gains typically fade.

Let's take a look at " Bloom Energy". We have last year's data. Wow, that was a really volatile stock . The stock has moved significantly, and it's more like a bet on the AI infrastructure.

It was affected by the heavy selling in July, with the stock dropping from 350 to around 160. Huge fluctuations, but since July 29, when it closed at its lowest point at 163.75, the stock has risen by 66.5%.

Just a rise since July 29th. So, it's a truly impressive recovery for Bloom Energy shares. There is also a lot of news, or rather big news, that we need to discuss.

A truly wonderful company . I am interested in knowing your opinions about it, and of course the news of the company joining the "S&P" index. Yes, I mean first and foremost, the business itself is growing remarkably, especially with the growth of data centers.

Their electrolysis technologies are primarily available to provide on-site power generation for data centers. This effectively solves the electricity bottleneck that we talked about as an obstacle to growth.

Therefore, Bloom Energy helps solve that specific problem in this regard.

Therefore, today UBS raised its rating on Bloom Energy to 325 from 300. This was an integral part of its inclusion in the S&P 500 index , expected on the 21st of this month . Now, for those who follow the S&P index and institutional investors, they actually have to buy the stock to match or balance their portfolios with the index. Therefore, this is a positive motivator.

You can see that clearly over the past two weeks. As you also mentioned, Alex, going back to July 29th, the stock was trading around its 200-day moving average . He bounced back well from that level.

However, it is a highly volatile name in the context of the data center field, but it remains one of those companies that helps solve one of the major constraints, which is the electricity bottleneck for artificial intelligence.

So, that's impressive. Let's trade it now with Tim Begum, options strategist at Pilot AI. I hope you had a nice weekend, Tim. Good morning to you. However, despite this good performance, this stock is still experiencing significant dramatic downward movements as well, Tim.

So, how do you view this volatile stock that is a prime example of an artificial intelligence stock ? What is your trading example?

Yes, of course. I hope your weekend went well too. I had a good weekend, Alex, and I think this stock, given the meteoric rise we saw before the announcement of its inclusion in the S&P index and today's price action, has overshot its limits a bit in my opinion.

In addition, history indicates that the gains resulting from inclusion in the S &P index often eventually fall back slightly . Therefore, I think that at some point you will see the stock encounter some resistance.

The 300-point level seemed like a sticking point , as it briefly broke through when all other AI stocks were rising strongly, then the stock crashed. Therefore, I think the 300 level will provide a little resistance on the upside.

Therefore, I am taking advantage of the fact that implied volatility has also increased today on stocks, and I am selling call option spreads between 310 and 320 for October, making me more than two dollars on the trade.

Therefore, I like the return on risk, which is over 25%.

I also like the fact that I have an additional safety margin of about 10% up from the current stock trading price .

So, who knows what will happen with these AI stocks ? As we have seen, volatility is likely to continue, but we are certainly receiving some resistance from the general public towards artificial intelligence.

So, I think there will be a slowdown in that first wave of strong gains that we have seen.

Therefore, I think selling call option spreads, not just on Bloom Energy because of the S &P listing, but generally on some AI stocks that are back in the hot again now, seems very logical in the current market conditions.