Today when US markets open I am planning on taking a large swing put position in NVDA with various deep OTM strikes.
Here's the complete case for a NVDA top having been made and the start of a massive mean reversion.
For a while I've had the 1,000 area marked out as an important level for NVDA. Not based on it being a psychological level (Tbh, I feel they spike out more than they hold) but because a confluence of other factors put the resistance in this area.
Started talking about the NVDA rally to 1,000 area around 500.
With further follow ups saying I think we'd see a massive drop if and when this level was met.
More recently I've made posts discussing the macro bear setups we have in AI across the board. Many of these stocks are significantly down now.
The NVDA chart does not look immediately bearish from many perspectives, I am sure, but this range like action has formed in a sequence of lower lows and, so far, lower highs.
This is similar to the various different dynamics I recently spoke about in the possible BTC top. All of the major concepts mentioned here are transferable to the NVDA chart.
The case for a resistance zone in this area is really good for NVDA. What we need from here is an entry trigger for the short.
We can use the 76 correction strategy for both our entry and stop loss.
All we need then is a targeting method. We can do this by drawing a fib extension from the low to the high of the previous drop and looking for supports 2.20 - 2.61.
This would forecast NVDA back down to under 500.
Stop losses above the high. Since this is a bearish Elliot wave analysis, for it to be valid the high would have to be in.
Here's the complete case for a NVDA top having been made and the start of a massive mean reversion.
For a while I've had the 1,000 area marked out as an important level for NVDA. Not based on it being a psychological level (Tbh, I feel they spike out more than they hold) but because a confluence of other factors put the resistance in this area.
Started talking about the NVDA rally to 1,000 area around 500.
With further follow ups saying I think we'd see a massive drop if and when this level was met.
More recently I've made posts discussing the macro bear setups we have in AI across the board. Many of these stocks are significantly down now.
The NVDA chart does not look immediately bearish from many perspectives, I am sure, but this range like action has formed in a sequence of lower lows and, so far, lower highs.
This is similar to the various different dynamics I recently spoke about in the possible BTC top. All of the major concepts mentioned here are transferable to the NVDA chart.
The case for a resistance zone in this area is really good for NVDA. What we need from here is an entry trigger for the short.
We can use the 76 correction strategy for both our entry and stop loss.
All we need then is a targeting method. We can do this by drawing a fib extension from the low to the high of the previous drop and looking for supports 2.20 - 2.61.
This would forecast NVDA back down to under 500.
Stop losses above the high. Since this is a bearish Elliot wave analysis, for it to be valid the high would have to be in.
Comment:
When making bearish posts about NVDA I inevitably run into the "AI's the biggest thing now and in the future" narrative.
I don't dispute this, I just don't think it has a history of being useful for analysis of price moves. The natural comparison to draw is the internet of the late 1990s. Was going places, but stocks were going different places first.
Throughout history, it's always been a strong tendency for new developments in tech to be leading drivers and justifiers for broad bull markets.
Today the narrative is AI. In 1999 is was the internet. In 1929 it was communication, TV and cars.
There was always a reason it should go on forever, until there was a reason it stopped.
Read about the famous ground-breaking 1929s tech stock here:
I don't dispute this, I just don't think it has a history of being useful for analysis of price moves. The natural comparison to draw is the internet of the late 1990s. Was going places, but stocks were going different places first.
Throughout history, it's always been a strong tendency for new developments in tech to be leading drivers and justifiers for broad bull markets.
Today the narrative is AI. In 1999 is was the internet. In 1929 it was communication, TV and cars.
There was always a reason it should go on forever, until there was a reason it stopped.
Read about the famous ground-breaking 1929s tech stock here:
Comment:
I know some people who seem to have put a lot of effort and research into that think NVDA is basically Enron.
I've no thoughts on this. Don't care. A chart is a chart. Just saying. The people saying these things are people I'd personally not consider to be generally crazy people. They think before they talk.
I've no thoughts on this. Don't care. A chart is a chart. Just saying. The people saying these things are people I'd personally not consider to be generally crazy people. They think before they talk.
Comment:
One thing I'll tell you for a fact, if you Google "Nivida accounting fraud" - you get hits.
Aiming for strikes 800 and 750 in the somewhat near term.
Further development to the 500 strike (Although maybe after significant bounces).
The first sign we're looking for is a strong rejection of the 76 and heading into a sequence of lower lows and lower highs.
Note, don't be complacent just because we have early selling now. Reactions can happen even in up move and vicious spike outs are possible in bear moves.
With that being said, this is a good looking start - for now.