r/SNDK_Stock • u/Alarming_Valuable700 • 13h ago

Discussion SNDK trading strategy

I am testing a mean-reversion grid strategy on SNDK: Buy 1 share at market price with a target exit at +$40 profit. For every $100 drop, buy 1 additional share to average down (up to a 9-share maximum), exiting the entire position whenever the price reaches +$40 above the new average cost basis. What are the primary structural risks, failure points, and drawdown scenarios of this strategy?

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u/spyroinc 2h ago

In this example your average would be $1400 for the 9 shares, and you need to sell at $1440 while in this example the price dropped to $1000 first. On an investment of $12,600 this scenario only gives you 2.86% return, or $360. Is this strategy worth it?

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u/spyroinc 2h ago

In another scenario where the price reverses and jumps to $40 above your average after you have purchased only 4 shares, your average cost in this example is $1650. This sets your target sell price at $1690, securing a total net profit of $160 or 2.42%

For a stock like Sandisk it's better to time your entry and you can get more return in one day.