go long NVIDIA (NVDA) stock
Technical Analysis
Conservative Trading Plan
Entry Strategy
Position Sizing
Stop Loss
Profit Targets
Exit Strategy
Risk Management
Analysis
However, potential risks include:
Overall market volatility
Potential sector rotation out of technology stocks
Valuation concerns given the recent price appreciation
This conservative plan aims to capitalize on NVIDIA's strength while managing risk through careful entry points, position sizing, and a disciplined exit strategy. Always adjust the plan based on changing market conditions and your personal risk tolerance.
- Current Price: $127.47 (down 1.95%)
- Stock is trading above 50-day, 150-day, and 200-day moving averages
- RS Rating: 97, indicating strong relative strength
- Meets all criteria in the Mark Minervini template
- Recent earnings growth: 461% YoY (May 2024)
- Recent sales growth: 262% YoY (May 2024)
Conservative Trading Plan
Entry Strategy
- Wait for a pullback to the $120-$122 range
- This area is closer to the 50-day moving average ($115.1) and provides better risk/reward
Position Sizing
- Assuming $10,000 capital with maximum risk of $1,000
- Enter with 1/3 of intended position size at initial entry point
- Add remaining 2/3 on confirmation of upward momentum
Stop Loss
- Set initial stop loss at $114, just below the 50-day moving average
- This represents about 5-6% downside risk from the suggested entry range
Profit Targets
- First target: $136.15 (previous high)
- Second target: $140.76 (52-week high)
- Final target: $150 (psychological level)
Exit Strategy
- Scale out 1/3 of position at each profit target
- Trail stop loss as price moves up, using the 20-day moving average as a guide
Risk Management
- Strictly adhere to position sizing and stop loss rules
- Monitor overall market conditions and sector performance
- Keep an eye on upcoming earnings reports and company news
Analysis
- NVIDIA shows strong technical and fundamental characteristics, making it an attractive long candidate. However, the stock has had a significant run-up, so a conservative approach is warranted.
- The company's impressive earnings and sales growth, coupled with its leadership in AI and graphics processing, support a bullish outlook. The stock's high RS rating and adherence to the Minervini template further reinforce its potential.
However, potential risks include:
Overall market volatility
Potential sector rotation out of technology stocks
Valuation concerns given the recent price appreciation
This conservative plan aims to capitalize on NVIDIA's strength while managing risk through careful entry points, position sizing, and a disciplined exit strategy. Always adjust the plan based on changing market conditions and your personal risk tolerance.
Disclaimer
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