The color coded support levels shown on the chart are the levels I am currently watching on Nvidia should an extended pullback occur.
The levels were found using a simple, multi-fibonacci retracement method based on previous swing highs and swing lows that allowed me to spot local fib levels. I will possibly make a post on this one day as an educational resource.
There is a lot that will go into this so there is no way I can cover everything in this one post. So check for updates in the future.
In the meantime, we will start with the most bearish scenario and that would be below the .236 fib level at around $715.
I personally do not trade below the .236 but there is no rule that exists that you shouldnt. Its simply my personal preference not to.
This is the basement floor where many traders would choose to place limit orders with hopes that they hit. This is the area where the largest potential gains are made.
PLEASE NOTE: Nvidia does not HAVE to reach these exact prices. This is just simply a point of reference for one to borrow. Please apply your own analysis to come to your own, best conclusions.
With that being said, my favorite fib levels to buy are primarily whatever level the current price is closest to. Which means the .786 level near $812 is the level that should get your attention as of right now.
As you can see, the price wasted no time dropping to this level and one should note that this was not random. The first level that price usually pauses at when pulling back is the .786 fib level. And if this level holds on larger time frames, that would be the first signal of a possible bullish reversal/continuation. If this level holds on the weekly, bears will be at risk of losing momentum, and bulls could retest the all time highs again.
On the flipside, if NVDA breaks the .786 fib level ($812) then that would be the first true bearish signal. And although this is a daily chart, we are truly looking for closes below/above the fib levels on the WEEKLY.
The lower range of each fib level are the buy areas. The tops of the fib levels are the expected rejection areas.
You can see the price at each corresponding level as follows:
$838
$812
$791
$777
$762
$744
$715
To the left of the candle sticks on the chart you will see an example of how to ladder buy simply using the fib levels. It is fairly common sense but one should feel free to tweak it and apply their own strategies as long as risk management is being practiced.
Check back in the coming days on this and if you have made it this far reading this please leave a like!!
The levels were found using a simple, multi-fibonacci retracement method based on previous swing highs and swing lows that allowed me to spot local fib levels. I will possibly make a post on this one day as an educational resource.
There is a lot that will go into this so there is no way I can cover everything in this one post. So check for updates in the future.
In the meantime, we will start with the most bearish scenario and that would be below the .236 fib level at around $715.
I personally do not trade below the .236 but there is no rule that exists that you shouldnt. Its simply my personal preference not to.
This is the basement floor where many traders would choose to place limit orders with hopes that they hit. This is the area where the largest potential gains are made.
PLEASE NOTE: Nvidia does not HAVE to reach these exact prices. This is just simply a point of reference for one to borrow. Please apply your own analysis to come to your own, best conclusions.
With that being said, my favorite fib levels to buy are primarily whatever level the current price is closest to. Which means the .786 level near $812 is the level that should get your attention as of right now.
As you can see, the price wasted no time dropping to this level and one should note that this was not random. The first level that price usually pauses at when pulling back is the .786 fib level. And if this level holds on larger time frames, that would be the first signal of a possible bullish reversal/continuation. If this level holds on the weekly, bears will be at risk of losing momentum, and bulls could retest the all time highs again.
On the flipside, if NVDA breaks the .786 fib level ($812) then that would be the first true bearish signal. And although this is a daily chart, we are truly looking for closes below/above the fib levels on the WEEKLY.
The lower range of each fib level are the buy areas. The tops of the fib levels are the expected rejection areas.
You can see the price at each corresponding level as follows:
$838
$812
$791
$777
$762
$744
$715
To the left of the candle sticks on the chart you will see an example of how to ladder buy simply using the fib levels. It is fairly common sense but one should feel free to tweak it and apply their own strategies as long as risk management is being practiced.
Check back in the coming days on this and if you have made it this far reading this please leave a like!!
Comment:
Another update on NVDA as its much awaited stock split is set for tomorrow after the close. It should be no surprise that we have witnessed the sell off in price as most news events, especially stock splits, are sold by smart money.
It is my personal opinion that after the split, the stock will run back up in price in the coming days, but in the meantime I stick to the chart and allow that to tell me what the news is. So with no further delay lets get into it.
In the previous update we talked about how NVDA would at least retest the $762 level after abruptly breaking it on the Thursday close. This did indeed occur, however, we did not see much else after that as the price plunged further after confirming rejection and broke clean below our infamous .236 fib level.
This is where the trade setup now begins in the fact that there are a few ways to approach this opportunity:
1) A limit buy order centered around the $715 price with a long at $720 and a tight stop loss just below the $715 price level. Keep in mind that this would be calling the bottom and unfortunately it is impossible to ever know the exact bottom even with fibonacci retracement.
I am more interested in the meaty, high volume areas in between the top and bottom rather than stressing about the exact bottom and tops of price action.
The 2nd option, which is what I mentioned in the previous update, is to wait on a breakout of $744 (.236 fib) now that we have had our capitulation below it. This is my own personal favorite strategy and should price action break back above this level on the daily, I will be entering a long with a tight stop loss just below $744.
It should be noted, however, that if the fib levels plotted here are to continue to be respected, the .236 level should serve as a springboard that could quickly send the price back above $762 to ultimately retest $777.
Lastly, we should also be forming a gameplan if Nvidia goes the ultra bearish route by violating my fib retracement completely by breaking and closing below $715. Please know this is always a possibility and a good trader must be prepared for it. If that happens, a separate brand new idea will posted as there are excellent support levels below $715.
It is my personal opinion that after the split, the stock will run back up in price in the coming days, but in the meantime I stick to the chart and allow that to tell me what the news is. So with no further delay lets get into it.
In the previous update we talked about how NVDA would at least retest the $762 level after abruptly breaking it on the Thursday close. This did indeed occur, however, we did not see much else after that as the price plunged further after confirming rejection and broke clean below our infamous .236 fib level.
This is where the trade setup now begins in the fact that there are a few ways to approach this opportunity:
1) A limit buy order centered around the $715 price with a long at $720 and a tight stop loss just below the $715 price level. Keep in mind that this would be calling the bottom and unfortunately it is impossible to ever know the exact bottom even with fibonacci retracement.
I am more interested in the meaty, high volume areas in between the top and bottom rather than stressing about the exact bottom and tops of price action.
The 2nd option, which is what I mentioned in the previous update, is to wait on a breakout of $744 (.236 fib) now that we have had our capitulation below it. This is my own personal favorite strategy and should price action break back above this level on the daily, I will be entering a long with a tight stop loss just below $744.
It should be noted, however, that if the fib levels plotted here are to continue to be respected, the .236 level should serve as a springboard that could quickly send the price back above $762 to ultimately retest $777.
Lastly, we should also be forming a gameplan if Nvidia goes the ultra bearish route by violating my fib retracement completely by breaking and closing below $715. Please know this is always a possibility and a good trader must be prepared for it. If that happens, a separate brand new idea will posted as there are excellent support levels below $715.
And now we find ourselves approaching a level that all traders should be interested in and that is the .382 and the .236 fibonacci levels. As we can see, many fibs were carved right through after the .786 was broken, and now we find ourselves hanging just below the .382. This should get peoples attention as the next fib below us is the .236 and this in technical analysis terms is a fantastic area IF and only IF the price can confirm support above it.
The .236 is a very common reversal area in swings as is the .382 level as well.
Should the .236($744) break, for me personally I would refrain from seeking any further longs as things could become very volatile quickly. There is a potential nice buy zone around $715 but we will cross that bridge if/when we get there.
The ideal setup here is a capitulation in price that flushes below the .236, consolidates and the breaks BACK ABOVE the .236. This will be what I am waiting on as it is much nicer to buy when price action is freshly ascending after capitulation and confirming ABOVE levels of support vs falling after forming a bubble and crashing BELOW levels of support.
For now, I remain patient yet watchful of what type of market structure NVDA is about to put in. The week is about to close and I would not be surprised to see the price break back above $762 and $777 as these are levels that are important and have not been properly tested yet.
In previous history, NVDA has spent roughly 4-7 weeks in consolidation after pullbacks, so in the meantime keep your eye on the macro and continue to monitor how the price of NVDA responds to the .382 ($762) level.