priceactiontds - weekly update - nvidia #6Good day and I hope you are well.
Last time I talked about Nvidia was 2024-07-06 and Nvidia was at 125.8 and my targets were 117 first and later 100. Low was 106.3, so my last post was good for 9$ or 15%. Hope you made some.
comment: My reading from 3 weeks ago was correct but market did another bounce in between to form a nice lower high double top. Yes, double tops can be slightly higher/lower and technically function as a double top. Why do you care if they are not perfect if the market is treating them the same way? The big round number 100 as a target remains and the current tight bear channel is decent enough to get us there. There is always the possibility of the pattern failing and market would break above the bear flag to test the highs again. Given the overall market weakness for the past 2 weeks I expect a bounce more than another strong leg down. Given that the upcoming week will have huge amount of big earnings, I think market will react to those and I am not in the business of forecasting earnings. So how does this information help with structuring a trade from the current price 113? Not much to be honest. Please red below bull/bear case.
current market cycle: Most likely a trading range. The strong climactic bull trend is over and market is most likely in the process for forming a trading range at the highs. The argument that the big bull trend line, currently running at 100 is intact and therefore the bigger bull trend is still ongoing is valid.
key levels: 100 - 140
bull case: Every bull who bought above 120 is underwater and since the ath was at 140, there a probably plenty. Market now dropped below 120 for the third time and if bulls can not strongly close above 120 soon again, they will give up for good buying high and will only buy pullbacks. Earnings end of August can be another surprise upwards but would you bet on another ath? Risky to say the least. Bulls need to keep the current bull gap, down to 96, open or the bull trend for sure is over and the upside around 140 limited, while the downside risk stays the same.
bear case: Last time I wrote again that this stock will half again and the current 26% drop is a pretty good start. That's enough to burn all late bulls and they will not buy high again. That is why my preferred path is a bounce over the next 1-2 days but the bear flag will hold until market touches the 100$ target. If the bull flag breaks convincingly, I am wrong and bulls took control again and will most likely test above 130 again. The measured move target (orange line) is also around the weekly 20ema and the big round number 100. More than enough reasons to test that price.
short term: Leaning slightly bearish but given the amount of earnings next week and that the overall market is due for a bigger bounce, more reasonable is to be neutral until you see strong momentum to either side.
medium-long term: This stock will touch 100$ in 2024 again.
current swing trade: Last time I said on the next weakness I'd short and my target 117 was good but market gave 106. No current position but will look for shorts above 130 again.
