New Flex Ltd Trade Idea Ahead of S&P 500 Update
Here’s how traders can front run the firm’s surprising major index addition.
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There had been some thought late last year that SoFi Technologies (SOFI) would soon be added to the S&P 500. That was at least part of the reason for my selection in December 2025 of SOFI as my 2026 “stock of the year.” So far, that has not been one of my better picks. SOFI is down something like 38% year to date. I’ve been paying the market back this year for some of my more successful “stock of the year” picks over the years.
However, as June and Friday night’s S&P reconstitution announcement drew to their closes, SOFI showed some life. Maybe this time? This is a reason why I remain long the stock and why the name is a core member of my “$10K Portfolio” here at TheStreet Pro.
But no. Not this time. We’ll stay the course. It’s not looking like SOFI will make us proud in 2026, but there’s a reason why we play all nine innings in baseball.
The Announcement
On Friday evening, S&P Dow Jone Indices made the announcement. Marvell Technology (MRVL) and Flex (FLEX) will be added to the S&P 500 in a couple of weeks. The actual changes will go into effect on Monday, June 22. That usually makes the Friday close going into the event fairly wild. This year, the Juneteenth holiday falls on that Friday, so Thursday, June 18, will be the date for traders gaming the close ahead of the rebalancing to circle.
Pool Corporation (POOL) and Campbell’s (CPB) will be deleted from the prestigious and most heavily tracked (by professionals) U.S. large-cap equity index to make room for these two. I don’t think anyone is surprised by the inclusion of MRVL, but FLEX may have caught a few folks off guard. Not that FLEX is not deserving, it’s just not top of mind.
What Gets a Firm Included?
How does a firm even come into consideration for inclusion in the S&P 500?
Publicly traded firms must have been profitable for at least the last four quarters as a whole for the most recent quarter specifically. Firms must run with a market capitalization of at least $22.7 billion. They also must meet float and volume criteria. Finally, companies need to be based in the U.S. and have traded on one of several approved U.S. stock exchanges for at least 12 months. This is why a firm that may be worth almost $2 trillion, such as SpaceX, won’t be considered for the next admission. SpaceX is not profitable and won’t be publicly traded for at least a year for another year.
The Chart
While FLEX peaked this past Wednesday, the shares sold off on Friday ahead of the announcement and are not trading higher late on Monday morning. That said, FLEX, a company that provides technology innovation, supply chain and manufacturing solutions to a number of industries and is the world’s third-largest global electronics manufacturing services firm by revenue, is up 151.2% year to date.
Readers will see that FLEX remains in an uptrend illustrated here by an Andrews’ Pitchfork model. The central trendline is where I would place a moving pivot (currently $166). The lower trendline or the 21-day EMA ($140) is where the swing crowd will be tested. Losing that level would be our panic point as well below the market, an unfilled gap from early May still exists. The daily MACD is postured quite bearishly.
Despite the cheery news, I see the move into the S&P 500 as largely priced. There could be some short-term upward facing volatility that traders might take advantage of. However, traders probably need to be protecting themselves at this point. Personally, rather than chase the news, I’d rather write August 21 FLEX $110 puts for $4 per contract than pay these prices for the equity. Just an idea.
At the time of publication, Guilfoyle was long SOFI equity.
