Technical & fundamental analysis to determine buy area:Nvidia
Hello,
NVIDIA Corp engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the following segments: Graphics Processing Unit (GPU), Tegra Processor, and All Other.
The company is setting up for buy positions on the 6hour & bigger timeframes. I will be looking to buy the stock from around USD 772 areas. The pattern forming is a corrective wave. The pattern that has worked very often in markets, its very key in seeing entries as well as target areas. An example can be seen here
Another corrective wave can be seen here
After understanding the patterns being formed and the price action being printed on the charts, very key is also to understand the fundamentals affecting the company. A simple way of looking at this is by looking at the SWOT analysis. A SWOT analysis evaluates a company's strengths, weaknesses, opportunities, and threats. Here's a detailed SWOT analysis for NVIDIA.
Strengths
Innovative Technology: NVIDIA continuously pushes technological boundaries with advancements in AI, deep learning, and real-time ray tracing, maintaining a competitive edge.
Strategic Partnerships and Acquisitions: The company has formed strategic alliances and acquired companies like Mellanox and ARM (pending regulatory approval), enhancing its technological capabilities and market reach.
Weaknesses
High R&D Costs: The company invests heavily in research and development to stay ahead of competitors, which can strain financial resources.
Opportunities
Automotive Industry: NVIDIA's advancements in autonomous driving technology can capitalize on the growing trend towards self-driving cars.
5G Technology: The rollout of 5G technology could drive demand for NVIDIA’s products, particularly in mobile edge computing and other applications.
Metaverse Development: NVIDIA's technologies are well-positioned to support the development of the metaverse, a rapidly growing virtual world market.
Threats
Geopolitical Tensions: Trade tensions, particularly between the US and China, could affect NVIDIA’s global operations and supply chains.
Technological Obsolescence: Rapid technological changes mean that NVIDIA must continually innovate to avoid obsolescence.
NVIDIA's strong market position and innovative capabilities provide a solid foundation for future growth. However, the company must navigate competitive pressures, regulatory challenges, and economic uncertainties to sustain its leadership in the tech industry.
With this in mind and the technical analysis showing a corrective Flag pattern forming, it is wise to wait and buy the stock from the bottom. Adding in the use of indicators can also build your investment thesis and make your trades more confident. In our case, I shall be incorporating the MACD to look & confirm my buy. For me the zero crossover will confirm my buy thesis for me to trigger my positions.
I will be buying from the bottom. This is because I do not short quality companies & buying from the dip greatly reduces the risk.
GOOD luck in your trading journey!
NVIDIA Corp engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the following segments: Graphics Processing Unit (GPU), Tegra Processor, and All Other.
The company is setting up for buy positions on the 6hour & bigger timeframes. I will be looking to buy the stock from around USD 772 areas. The pattern forming is a corrective wave. The pattern that has worked very often in markets, its very key in seeing entries as well as target areas. An example can be seen here
Another corrective wave can be seen here
After understanding the patterns being formed and the price action being printed on the charts, very key is also to understand the fundamentals affecting the company. A simple way of looking at this is by looking at the SWOT analysis. A SWOT analysis evaluates a company's strengths, weaknesses, opportunities, and threats. Here's a detailed SWOT analysis for NVIDIA.
Strengths
- Market Leadership in GPUs:
Innovative Technology: NVIDIA continuously pushes technological boundaries with advancements in AI, deep learning, and real-time ray tracing, maintaining a competitive edge.
- Strong Brand Reputation:
- Diverse Applications
Strategic Partnerships and Acquisitions: The company has formed strategic alliances and acquired companies like Mellanox and ARM (pending regulatory approval), enhancing its technological capabilities and market reach.
- Robust Financial Performance
Weaknesses
- High Dependency on Gaming Market:
- Supply Chain Constraints:
High R&D Costs: The company invests heavily in research and development to stay ahead of competitors, which can strain financial resources.
- Regulatory Risks:
Opportunities
- Growth in AI and Machine Learning:
- Expansion in Data Centers:
Automotive Industry: NVIDIA's advancements in autonomous driving technology can capitalize on the growing trend towards self-driving cars.
5G Technology: The rollout of 5G technology could drive demand for NVIDIA’s products, particularly in mobile edge computing and other applications.
Metaverse Development: NVIDIA's technologies are well-positioned to support the development of the metaverse, a rapidly growing virtual world market.
Threats
- Intense Competition
Geopolitical Tensions: Trade tensions, particularly between the US and China, could affect NVIDIA’s global operations and supply chains.
- Intellectual Property Challenges
- Economic Downturns:
Technological Obsolescence: Rapid technological changes mean that NVIDIA must continually innovate to avoid obsolescence.
NVIDIA's strong market position and innovative capabilities provide a solid foundation for future growth. However, the company must navigate competitive pressures, regulatory challenges, and economic uncertainties to sustain its leadership in the tech industry.
With this in mind and the technical analysis showing a corrective Flag pattern forming, it is wise to wait and buy the stock from the bottom. Adding in the use of indicators can also build your investment thesis and make your trades more confident. In our case, I shall be incorporating the MACD to look & confirm my buy. For me the zero crossover will confirm my buy thesis for me to trigger my positions.
I will be buying from the bottom. This is because I do not short quality companies & buying from the dip greatly reduces the risk.
GOOD luck in your trading journey!
Portfolio Manager
Dyer & Blair investment Bank, Kenya.
Follow below handles for investment insights
Twitter: twitter.com/thesharkke
Free in-depth stock markets analysis Telegram channel: t.me/stocksfromtechnicaleye
Dyer & Blair investment Bank, Kenya.
Follow below handles for investment insights
Twitter: twitter.com/thesharkke
Free in-depth stock markets analysis Telegram channel: t.me/stocksfromtechnicaleye
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