NVDA: Technical Case for a Bull Run
During late September, I performed a technical analysis indicating NVDA would reach into the $290 price range before correcting. NVDA has far surpassed a simple "correction" and has entered into oversold conditions as indicated by my current analysis. A 4 wave elliot impulse wave brought NVDA well below 50% off the ATH within a matter of 6 weeks.
We have since seen NVDA trading around the .382 and .5 fibonacci levels (based on high of $290 and strong support at $20). NVDA has recently completed another bearish ABCD pattern, but has failed to break under the .382 fibonacci level around $120. Also note the three bottoms formed just above the .382 fib level.
Given that the FED has put an indefinite pause on raising the federal funds rate, and has made it clear they are willing to expand their balance sheet (aka, buy bonds and stock), NVDA is set to rise along with the rest of the market. Suppressed interest rates will encourage tech companies to expand their infrastructure, benefiting hardware companies such as NVDA. Given the oversold level we still see NVDA trading around, it is likely to outperform its FANG brethren in the months to come.
Personal strategy: medium to long-term debit spread, 5:1 reward/risk ratio
We have since seen NVDA trading around the .382 and .5 fibonacci levels (based on high of $290 and strong support at $20). NVDA has recently completed another bearish ABCD pattern, but has failed to break under the .382 fibonacci level around $120. Also note the three bottoms formed just above the .382 fib level.
Given that the FED has put an indefinite pause on raising the federal funds rate, and has made it clear they are willing to expand their balance sheet (aka, buy bonds and stock), NVDA is set to rise along with the rest of the market. Suppressed interest rates will encourage tech companies to expand their infrastructure, benefiting hardware companies such as NVDA. Given the oversold level we still see NVDA trading around, it is likely to outperform its FANG brethren in the months to come.
Personal strategy: medium to long-term debit spread, 5:1 reward/risk ratio
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