Is NVDA overpriced relative to GOLD?
Updated
My thesis is that comparing an equity price in a ratio to spot gold expecially on long
time frames can sometimes bring clarity to complicated trading decisions. Here, I seek
to determine since I hold both gold on the forex market and NVDA call options, whether
I should sell one to buy the other. Upon putting the ratio of NVDA price compared with
spot gold on a weekly chart I have discovered that NVDA has ran up considerably over
the past 5-6 years into an obvious all time high. This is not a surprise given NVDA's position
as a subsector leader and a frontrunner on the AI revolution. The last golden cross of the pair of
HMAs was this past March. Relative strength of the ratio is nearly 80. Importantly, the
mass index is about to trigger a reversal.
Overall, because of this analysis, I will dollar cost average out of the NVDA call options
closing them at weekly highs over the next month. With the proceeds, I will increase
my spot gold position and look into call options on one of the gold ETFs.
time frames can sometimes bring clarity to complicated trading decisions. Here, I seek
to determine since I hold both gold on the forex market and NVDA call options, whether
I should sell one to buy the other. Upon putting the ratio of NVDA price compared with
spot gold on a weekly chart I have discovered that NVDA has ran up considerably over
the past 5-6 years into an obvious all time high. This is not a surprise given NVDA's position
as a subsector leader and a frontrunner on the AI revolution. The last golden cross of the pair of
HMAs was this past March. Relative strength of the ratio is nearly 80. Importantly, the
mass index is about to trigger a reversal.
Overall, because of this analysis, I will dollar cost average out of the NVDA call options
closing them at weekly highs over the next month. With the proceeds, I will increase
my spot gold position and look into call options on one of the gold ETFs.
Note
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