NASDAQ: Nvidia (NVDA) has recently experienced an uptrend after a death cross formed consisting of the 65 and 200 EMAs on the 1 Day chart.
If we analyze back on Nvidia starting in 1999, we can count a total of 10 death crosses that have occurred, and 9 have been immediately followed by downtrends. Although a single death cross did not have an immediate downtrend, shortly after this event (approx. 282 days) another death cross formed and price then fell roughly twice as it historically has, almost appearing to make up for the missed signal.
From a quantitative perspective:
If we calculate the raw historical success rate using:
Raw Success Rate = 9/10 = 90
With this calculation the observed success of 65/200 EMA death crosses correlating to an immediate downtrend is 90%
In order to avoid overconfidence we can apply Laplace smoothing using:
Smoothed Probability = 9+1/10+2 = 10/12 or 0.8333
With this calculation the observed success of 65/200 EMA death crosses correlating to an immediate downtrend is 83%
Given the results of the data I personally feel that there is a Very High (83%) chance this death cross that recently formed on the 1 Day chart (around 04/16/2025) will immediately lead to a downtrend. And a Low (17%) chance it does not. Furthermore these results support a technical analysis hypothesis that I formed prior.
Many different systemic factors can contribute to the market movement, but mathematics sometimes leave subtle clues. Will the market become bearish? Or will Nvidia gain renewed bullish interest?
Disclaimer: Not Financial Advice.
If we analyze back on Nvidia starting in 1999, we can count a total of 10 death crosses that have occurred, and 9 have been immediately followed by downtrends. Although a single death cross did not have an immediate downtrend, shortly after this event (approx. 282 days) another death cross formed and price then fell roughly twice as it historically has, almost appearing to make up for the missed signal.
From a quantitative perspective:
If we calculate the raw historical success rate using:
Raw Success Rate = 9/10 = 90
With this calculation the observed success of 65/200 EMA death crosses correlating to an immediate downtrend is 90%
In order to avoid overconfidence we can apply Laplace smoothing using:
Smoothed Probability = 9+1/10+2 = 10/12 or 0.8333
With this calculation the observed success of 65/200 EMA death crosses correlating to an immediate downtrend is 83%
Given the results of the data I personally feel that there is a Very High (83%) chance this death cross that recently formed on the 1 Day chart (around 04/16/2025) will immediately lead to a downtrend. And a Low (17%) chance it does not. Furthermore these results support a technical analysis hypothesis that I formed prior.
Many different systemic factors can contribute to the market movement, but mathematics sometimes leave subtle clues. Will the market become bearish? Or will Nvidia gain renewed bullish interest?
Disclaimer: Not Financial Advice.
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.
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.