One thing is crystal clear to me, NVIDIA has bounced incredibly well off its 2022 lows, to the tune of nearly 150%! What a trade...
I missed it.
In addition, check out the double bottom that I marked on the chart. In hindsight, it looks so obvious. It's important to use these long-term charts to learn and get better. Had you zoomed out, you may have seen this low from a mile away.
Next time...
But now it appears that NVIDIA is being talked about everywhere as it marches forward. This post is designed to explain why I think NVIDIA has too much resistance ahead - don't chase! But also why the market sees its potential.
Let's get to it:
Nevertheless, NVIDIA, thanks to the speed of its recent bounce, is now the 7th largest company on Earth. Will it pass Buffett and Berkshire Hathaway next?
The list looks like this:
Apple - $2.6 trillion Microsoft - $2.1 trillion Saudi Aramco - $2.1 trillion Alphabet (Google) - $1.3 trillion Amazon - $1.1 trillion Berkshire Hathaway - $715.4 billion NVIDIA - $685.5 billion Tesla - $576.4 billion Meta (Facebook) - $555.7 billion Johnson & Johnson - $506.3 billion
As AI increases, machine learning, and their eventual integration into machines, NVIDIA remains poised to lead the way. And that's where I personally think the long-term story remains in tact. I am not looking at NVIDIA for a trade right now - the risk/reward makes little sense. But, long-term, if NVIDIA suffers another correction, I'll be ready.
Why?
The other day I joked that while ChatGPT and other AI online tools are cool, we have yet to see this integrated with anything physical. But that is not far away - a fridge that learns your habits about what you eat so it can place orders automatically or set your fridge to the perfect temperature. Or a lawn mower that learns to master your lawn after each attempted cut, turning your lawn into a flawless putting green that your neighbors marvel at. But this also where things can get a little crazy… like if the lawn mower starts to think you’re the putting green! 😝
I hope you enjoyed this free flowing chat and a few notes that I added to the chart.
nvda is going lower from here. PE is 150. who the hell is buying this stock at this PE level blows my mind.
zAngus
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I hold. Missed the full run, but am up around 70% from entry so I can sit through a few pullbacks to better value. I like it as an AI infrastructure play.
SquishTrade
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@zAngus, Well played!! Trying to catch the entire move gets many traders in trouble. Catching a +70% move is amazing.
This reminds me of a Jesse Livermore quotation about trying to catch the first and last eighth of a move, which lead to many losses usually. I'll copy and paste the quotation below for other readers who may be unfamiliar with it (as I'm sure it's not new for you): "One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These are the two most expensive eighths in the world." "One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These are the two most expensive eighths in the world."
a914freak
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Hard to believe you didn't catch the 263 bounce! Like you i've been watching this climb for the past 3 months saying ahhh it will pull back. That's when I realized they can't have it pull back because just like Apple and MSFT it's what's propping the rest of the market up (small cap/mid cap value) stocks. With all that said I did buy the dip at 263 and glad I did, worst case it makes a triple top and then heads back down for a larger correction.
waynelovelace
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i bought at $134 and sold sadly $241 i say sadly, still made 70%, but missed out on another $30 per share, now waiting for a rentry.
a914freak
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@waynelovelace, 263 was the re-entry back on Monday. If it hit's 279 on Monday and rejects that will be a triple top and the correction to the 250 area is what I am calling for. JMHO.
pejman_zwin
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Terrfic💥, Thanks for sharing.
jaxdog
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Great analysis. I agree with all you've said. Market overall is too weak here and double tops have been playing out rather than breakouts (yes, there are some exceptions).
andrew8644
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Nice work. Any estimate is great I have been looking for my opportunity to jump in .
WLinvestment
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Awesome, thorough analysis. I find charting the BTC/NVDA ratio can also be telling for relative value