Welcome to another edition of "Technical Analysis Works". Today we will be taking a closer look at NVDA, one of the most popular semiconductor stocks in the market. Back in January 23rd, I posted an article discussing the formation of a large inverted head and shoulders pattern on the NVDA chart. I highlighted that a breakout of resistance would likely lead to a significant rally, and that is exactly what has happened. Since then, NVDA has been on a bull run, moving almost straight up.
Currently, NVDA is testing an important area of historical resistance at the $270-$275 level. Bulls need to break through this level in order to maintain control and open the door to the $330-$340 range, which was the original target from the technical formation.
However, the lack of significant retrace and warning signals from indicators, including the Wave Master Pro, suggest that it may be wise to wait for a pullback before making any further moves. Catching a falling knife, or in this case, a rising knife, is never a good idea. Instead, a pullback would confirm that we are going to pivot and provide a better entry point for traders.
Volume analysis is also showing promising signs for NVDA. Using my volume analysis indicator, I have observed a decrease in selling pressure, with spikes of buying pressure appearing on the chart. This is a positive indication that bullish momentum is still present in the stock.
However, it is important to note that short-term traders who decide to go short need to manage their risk carefully, keeping it above the $275 level. Any moves above this level could trigger a bullish continuation and lead to a further rally.
In summary, NVDA's recent bull run has been impressive, but traders need to remain cautious and wait for a pullback before making any further moves. Keep a close eye on the resistance levels, as well as the signals from key technical indicators such as the Wave Master Pro and volume analysis. With careful risk management and a patient approach, traders can navigate the market and potentially profit from NVDA's continued momentum.
Currently, NVDA is testing an important area of historical resistance at the $270-$275 level. Bulls need to break through this level in order to maintain control and open the door to the $330-$340 range, which was the original target from the technical formation.
However, the lack of significant retrace and warning signals from indicators, including the Wave Master Pro, suggest that it may be wise to wait for a pullback before making any further moves. Catching a falling knife, or in this case, a rising knife, is never a good idea. Instead, a pullback would confirm that we are going to pivot and provide a better entry point for traders.
Volume analysis is also showing promising signs for NVDA. Using my volume analysis indicator, I have observed a decrease in selling pressure, with spikes of buying pressure appearing on the chart. This is a positive indication that bullish momentum is still present in the stock.
However, it is important to note that short-term traders who decide to go short need to manage their risk carefully, keeping it above the $275 level. Any moves above this level could trigger a bullish continuation and lead to a further rally.
In summary, NVDA's recent bull run has been impressive, but traders need to remain cautious and wait for a pullback before making any further moves. Keep a close eye on the resistance levels, as well as the signals from key technical indicators such as the Wave Master Pro and volume analysis. With careful risk management and a patient approach, traders can navigate the market and potentially profit from NVDA's continued momentum.
