NVDA: Double Top?
Updated
The ticker everyone is watching, NVDA. It may be too early to call it a double top, but given that QQQ has made highs above the drop on NVDA earnings day, I think NVDA is a little exhausted.
$500 has been resistance for 4 trading days, and I think we will continue to move in this channel for a while. I do think that we will go down to test the bottom trendline soon, which corresponds with the 0.236 fib level, and will be where the 20W MA and 21W EMA correspond to in a week or so. I think we could see a drop into there by the end of September.
More likely than not, we will see it find support around the $400-420 area, but if it breaks then we have a clear top signal for months to come. Breaking below the trendline, 0.236 fib level, and the MAs will most likely send NVDA to fill the gap down to $305.
Moreover, with the DXY finding key support (see my recent post about that) and US10Y bouncing up, I think that risk-assets won't perform very well in the next month.
In addition, September is infamously known for being a weak month, so it may become a self-fulfilling prophecy (people sell in September because September is usually a bad month, leading to more selling, ultimately making September a bad month).
Given all of this, NVDA is still in an uptrend with higher highs and higher lows. I am not saying that NVDA is bearish, but I think that it will soon correct.
$500 has been resistance for 4 trading days, and I think we will continue to move in this channel for a while. I do think that we will go down to test the bottom trendline soon, which corresponds with the 0.236 fib level, and will be where the 20W MA and 21W EMA correspond to in a week or so. I think we could see a drop into there by the end of September.
More likely than not, we will see it find support around the $400-420 area, but if it breaks then we have a clear top signal for months to come. Breaking below the trendline, 0.236 fib level, and the MAs will most likely send NVDA to fill the gap down to $305.
Moreover, with the DXY finding key support (see my recent post about that) and US10Y bouncing up, I think that risk-assets won't perform very well in the next month.
In addition, September is infamously known for being a weak month, so it may become a self-fulfilling prophecy (people sell in September because September is usually a bad month, leading to more selling, ultimately making September a bad month).
Given all of this, NVDA is still in an uptrend with higher highs and higher lows. I am not saying that NVDA is bearish, but I think that it will soon correct.
Note
So far it's on track. The only thing that might change this is that it seems like the DXY and US10Y are topping out. $443 might have been the bottom of this move. We didn't drop as much as I expected when we got under $450, so I am a little skeptical. Let's see what happens.
Trade closed: target reached
NVDA ticked at exactly $420.00 today. If you are short I think this is a good place to take profits. We've reached the target zone and the 20W MA is acting as support.
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