Late 2018 wasn't kind to NVDA. Declining cryptocurrency mining demand both hurt their long term growth expectations that were pricing that in and shed light on their large inventory holdings due to this regime change. Just when it seemed the worst had come just before earnings (the fateful guidance announcement in late January that retraced back to their 2018 low), their earnings call was a surprise that sailed over the analysts heads. Well played NVDA, and you're proving Mad Money's Jim Cramer right when he called that the bottom. I agreed at the time but wanted to wait out the short term price swings until I could hop onto a firmly established uptrend.
Well, that time came last week. MACD is postive and rising with a conversatively increasing histogram showing that the short term moving averages are diverging up from the long term averages, and that's a trend continuation indicator. RSI crossed upward over 60 on Friday, and that is another good trend indicator that also predict significant price movement upward before this trend loses steam. Directional movement looks good with a rising +DI showing price movement upward with -DI falling over ADX indicating that the prior downtrend is fading into history and the new uptrend is gaining momentum. Short interest is relatively flat with only a small indications of bears getting squeezed out with only a minor influence on upward price action. Volume is stangating indicating that others are waiting for confirmation signals before buying, but watch out for the bulls through the gate when that happens!
As always, if you chose to trade on a strategy similar to this, set your stops to preserve capital and retain your gains. My initial stop is at $151, and I'll ratchet it up as the ATR begins to rise and I can switch to a trailing ATR stop loss strategy. Expect price resistance at or near previous 2018 lows around $175 and later $185 with a possible retracement to a short term support of $155 which is the monthly low from early February 2019. If prices move strongly through these points of resistance, expect them to continue upward until meeting longer term resistance at November's high of $222.
Well, that time came last week. MACD is postive and rising with a conversatively increasing histogram showing that the short term moving averages are diverging up from the long term averages, and that's a trend continuation indicator. RSI crossed upward over 60 on Friday, and that is another good trend indicator that also predict significant price movement upward before this trend loses steam. Directional movement looks good with a rising +DI showing price movement upward with -DI falling over ADX indicating that the prior downtrend is fading into history and the new uptrend is gaining momentum. Short interest is relatively flat with only a small indications of bears getting squeezed out with only a minor influence on upward price action. Volume is stangating indicating that others are waiting for confirmation signals before buying, but watch out for the bulls through the gate when that happens!
As always, if you chose to trade on a strategy similar to this, set your stops to preserve capital and retain your gains. My initial stop is at $151, and I'll ratchet it up as the ATR begins to rise and I can switch to a trailing ATR stop loss strategy. Expect price resistance at or near previous 2018 lows around $175 and later $185 with a possible retracement to a short term support of $155 which is the monthly low from early February 2019. If prices move strongly through these points of resistance, expect them to continue upward until meeting longer term resistance at November's high of $222.
Trade closed: stop reached
I was able to skate by with a razor thin profit, but I overestimated the power of a stock to boom in the face of so much bad news. I've got another semiconductor idea, and it's not NVDA.Note
This one has remained flat and the bulls (myself included) got trapped in some wishful thinking at bottom fishing. This will roar when in breaks out, but not until mid to late March at the earliest according to my estimates.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.