Like many stocks forming a base right now, NVDA is also a victim of false breakups and wild gyrations recently.
One may wait to test the next breakup (again) or alternatively, "buy the dips".
However we before we buy a dip, we want to check that the bullish bias for the stock is still intact, which is the case for NVDA right now:
1. pullback was within 38.2% fib retracement from its AB upswing since hitting bottom in early October (ie still within acceptable range of a "normal pullback") 2. higher hi's and higher lo's still intact 3. bullish divergence between price and RSI acting out (although I have to emphasize that bullish divergence is only predictive of short term price movement, usually next 2-3 candles) 4. lastly, a bullish morning star formation.
Go long at the next candle as soon as we have price trading just above the close of yesterday's candle with initial stop placed just slightly below the low of the morning star pattern (~ 158).
The trick to trading is not about being right most of the time but wining bigger when right and losing smaller when wrong. Hence money management (ie stop loss, position sizing etc) are also parts of equation.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
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Definitely a no-go day! Instead of going above yesterday's close, the stock gapped down in line with the very bearish market sentiment after some economic reports today. All bullish bets off for now
@TheWinningDay, thanks. no-man's territory right now. Will see if we get a falling wedge next :)
heavy_assault
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by far the biggest bubble in the history of the stock market, by far the most overhyped company in the history of mankind.
Juliac
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@heavy_assault, do elaborate why you think so? I am curious.
heavy_assault
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@Juliac, one glance at the valuation. one glance at the number of people worshipping nvda's AI chips.
one glance at brokers using non GAAP in their target price with 0% discount rate and 100% TGR, when their non GAAP is full of share based payments and many many other recurring expenses, and always well above 50% more than their GAAP, sometimes 100% more than GAAP. so not just overhype and bubble, but also blatant lies from brokers giving nvda's price target.
i don't even know how to describe the overhype, overvaluation, and purposely manipulated method of calculating nvda's price target, in order to pump the share price infinitely higher than its true worth.
fair price 50 bucks.
Juliac
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@heavy_assault, haha. Agree that we can never understand the price if we are fundamentalists (Guess Warren Buffet won't buy NVDA at current price!). Just like how TSLA was shooting to the moon while being outrageously overvalued last year. However, being a "technical" trader, I do not attempt to justify it's price. If the price of a great company starts to look bearish even though it is fairly or under-valued, I would still exit. Anyway, while NVDA looks weak right now, I seriously doubt it will go anywhere as low as $50 in the coming months.
heavy_assault
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@Juliac, it wont ever get there because the manipulators are in love with nvd'a AI chips and they will never let the share price drop. this company is being priced to take over everything in the world and develop every technology anyone has ever desired. fundamentally it's worth no more than $50-60, under ANY assumptions, but the manipulators who are infatuated with nvda's AI chips and their data center business will keep pumping this tulip dotcom cryto bubble 24/7, so the share price only goes up.
nvda at current price is over 1000000 times more overvalued than tesla at $400. and tesla at $400 is already bubble of a life time valuation. nothing in history comes close to nvda's bubble status, not even tulip + bitcoin + dogecoin + all other crypto combined at their very peaks.
Juliac
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@heavy_assault, ok noted on the million times overvaluation..! as a techical trader, we should have stop losses in place (unless the stock gaps down strongly overnight!). I am not in a hurry to stake anything in a big way unless Nasdaq can clear it's major trendline resistance or rise and stay above the 200 day moving average.
pankajsha59
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not agree with your id checkout my idea
Juliac
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@pankajsha59, you are right! It pays to check out the higher time frame. That bearish inverted hammer on weekly was a warning indeed!