NVDA is in a highly speculative scenario. For a long time, I've been seeing analysts shouting that the price is stretched and begging for a correction.
That's precisely what keeps the uptrend going. As long as there is a large number of open shorts and irrational trading of protections, these and other factors are likely to continue acting as fuel.
Some observations:
1 - I believe that the true uptrend (wave I) began in October 2002.
2 - From October 2007 to December 2012, a corrective triangle formation occurred (wave II).
3 - Since then, the most expansive movement of the trend started (wave III), peaking in November 2021.
4 - During the year 2022, we might have seen another corrective pattern of a smaller degree (wave IV).
5 - And now, we would be witnessing the development of the final impulsive movement (wave V), with a high speculative degree fueled by the artificial intelligence boom.
Medium-term:
I understand that the price is trading in a pattern that we can define as an uptrend channel, with the likelihood of continuing the previous movement after the breakout. Alternatively, this could also be considered as a distribution channel.
In my perception, the asset is still not doing anything surprising based on its historical movements. I suggest observing longer periods between the years 2015 and 2021 to draw the same conclusion.
The point is that the price is really stretched, and trading it is clearly high risk.
My goal with this post is to reduce the noise of the narrative and opine that there are rational aspects to be evaluated within the asset's own history. And that speculation can persist for a longer period than most people may want to believe.
That's precisely what keeps the uptrend going. As long as there is a large number of open shorts and irrational trading of protections, these and other factors are likely to continue acting as fuel.
Some observations:
1 - I believe that the true uptrend (wave I) began in October 2002.
2 - From October 2007 to December 2012, a corrective triangle formation occurred (wave II).
3 - Since then, the most expansive movement of the trend started (wave III), peaking in November 2021.
4 - During the year 2022, we might have seen another corrective pattern of a smaller degree (wave IV).
5 - And now, we would be witnessing the development of the final impulsive movement (wave V), with a high speculative degree fueled by the artificial intelligence boom.
Medium-term:
I understand that the price is trading in a pattern that we can define as an uptrend channel, with the likelihood of continuing the previous movement after the breakout. Alternatively, this could also be considered as a distribution channel.
In my perception, the asset is still not doing anything surprising based on its historical movements. I suggest observing longer periods between the years 2015 and 2021 to draw the same conclusion.
The point is that the price is really stretched, and trading it is clearly high risk.
My goal with this post is to reduce the noise of the narrative and opine that there are rational aspects to be evaluated within the asset's own history. And that speculation can persist for a longer period than most people may want to believe.
Comment:
It aged well.