NVIDIA - 200 DSMA and OBV Analysis
An analysis of how the 200 DSMA and On Balance Volume can help us frame potential set ups for a Nvidia and what it might do next.
Bullish Case and Invalidation Level
Price is above the 200 DSMA at present and because we are breaking above a recent high on the OBV, this could signal higher highs for price similar to June 2020.
Invalidation Level: This bullish scenario can be invalidated if the OBV breaks below the lower resistance line, in which case we can then expect a revisit of 200 SMA.
Bearish Case subject to change of current trend
If we fall below the 200 DSMA or/and get rejected from the overhead OBV resistance line this would indicate a trend change to the downside and this would look similar to the Oct 2018 signal.
We could arguably be at a similar level to February 2020 (pre crash territory) which resulted in the orange handle price action in the prior cup and handle. A similar move would see use correct down to the 200 DSMA.
In terms of trading, the OBV would be your lead indicator here, if it breaks its trend to the down side breaching the lower resistance line I would exit the trade. Similarly if it holds and reaches higher towards the upper OBV resistance line I would sit on the trade until we reach the line, at which point you could reduce your position and take some profit, or wait for a confirmation of rejection from the overhead line, then de-risk. The point is, these OBV levels should be able to help you make your decision on the trade, it is ultimately your decision.
The chart is fascinating as current price action draws similarities to the Oct 2018 period, the Feb 2020 period and the June 2020 period, all of which were critical market moments. NVIDIA may be turning into a macro asset that can help us determine the overall market trend and direction.
Hope this helps
PUKA
Bullish Case and Invalidation Level
Price is above the 200 DSMA at present and because we are breaking above a recent high on the OBV, this could signal higher highs for price similar to June 2020.
Invalidation Level: This bullish scenario can be invalidated if the OBV breaks below the lower resistance line, in which case we can then expect a revisit of 200 SMA.
Bearish Case subject to change of current trend
If we fall below the 200 DSMA or/and get rejected from the overhead OBV resistance line this would indicate a trend change to the downside and this would look similar to the Oct 2018 signal.
We could arguably be at a similar level to February 2020 (pre crash territory) which resulted in the orange handle price action in the prior cup and handle. A similar move would see use correct down to the 200 DSMA.
In terms of trading, the OBV would be your lead indicator here, if it breaks its trend to the down side breaching the lower resistance line I would exit the trade. Similarly if it holds and reaches higher towards the upper OBV resistance line I would sit on the trade until we reach the line, at which point you could reduce your position and take some profit, or wait for a confirmation of rejection from the overhead line, then de-risk. The point is, these OBV levels should be able to help you make your decision on the trade, it is ultimately your decision.
The chart is fascinating as current price action draws similarities to the Oct 2018 period, the Feb 2020 period and the June 2020 period, all of which were critical market moments. NVIDIA may be turning into a macro asset that can help us determine the overall market trend and direction.
Hope this helps
PUKA
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.