October 15, 2024
Most investors are watching Nvidia this month.
The biggest story is that “Microsoft, Meta, Google, and Amazon are purchasing Nvidia GPUs in massive quantities to build increasingly large clusters of computers for their advanced AI work.”
The stock’s weekly data series projects more room to go, but the daily data analysis shows the stock is more overbought now than at any time since June.
The daily data analysis is interesting because most indicators are still bullish, but the Chaikin Oscillator has turned over. The Chaikin Oscillator, as defined by Stockcharts, “measures the momentum of the Accumulation Distribution Line (ADL) using the MACD formula. (This makes it an indicator of an indicator.)… This indicator is designed to anticipate directional changes in the ADL by measuring the momentum behind the movements. A momentum change is the first step to a trend change.”
I have not found Chaikin’s indicators particularly strong timing tools for trades, but they serve as warning signs, which I call Alerts.
Pivot Point levels indicate the Trend, which in the daily data is $116.68 after yesterday’s close of $138.07. R1 and R2 Resistance—the most likely trend turning points—are at $132.42 and $143.41, respectively. So, the current price is midway between the Daily R1 and R2.
Pivot Points for daily data use in recent months’ high, low, and close data. With the stock having gained so much in the past year, the Pivot Points for weekly and monthly data, which use the prior year’s data, are not helpful.
Most traders, including investors, use Pivot Points from 30-, 60-, and 120-minute charts based on the previous calendar week’s high, low, and close data in trade decisions. The R1 and R2 for these charts are $138.70 and $142.66, respectively. So, the current price is very close to the Intra-Daily R1, which is another warning.
Under such conditions, I think it is wise to consider volume and options trading data. This type of analysis is more than I wish to get into today, but I want to leave my general thoughts. An important saying in the market is that ‘stocks are not bought; they are sold.’ The meaning here is that the sell-side controls the trading, which it does by telling stories. The bank cartel, euphemistically called Wall Street, controls the sell-side.
In Nvidia’s case, those stories essentially come down to the rapid understanding that AI is the biggest game-changer since the discovery of the Internet and that this company is selling the world’s most powerful computer chips to major companies like Microsoft, Meta, Google, and Amazon that are driving the AI industry.
However, the billions of Nvidia chips sold to these companies are projected to happen over time. That’s a story, but to successfully trade, investors need to analyze minute, hourly, and daily data to determine trend reversal points.
This is particularly important in the case of Nvidia because the sell-side generates profit by selling high and buying low. They do this by telling stories. Nvidia is a monster profit opportunity for the sell-side. I measure that opportunity in trillions of dollars.
Intra-day S1 and S2 support is $127.87 and $121.00, respectively. Should NVDA trade down to $121.00 from $138.07, the profit opportunity is about $420 billion. That’s enormous, but it’s nowhere near the real opportunity because the bank cartel makes their trading profits in waves of trading that take many days at a time.
The Daily S1 and S2 are $105.70 and $89.96, respectively. In a real crunch, which we call a Bear market, the times the bank cartel offloads their positions from the previous year, the Weekly S1 ($25.51) might apply. But let’s take the Daily S2 ($89.96) as a reasonable point where the buy-side might be forced through margin calls and negative sentiment caused by ‘stories.’ The losses from today would be -34.8%, which is not unreasonable considering that is the market’s overall gain in the past 12 months. Well, 34.8% of $3.39 trillion is almost $1.2 trillion. Ka-ching shouts the sell-side. That number impresses even Jamie Dimon and his cohorts at JP Morgan, the bank cartel leaders.
There is too much profit opportunity with NVDA for the sell-side to ignore. As many of you know, I have worked both sides of the street at a very high level. I can almost hear the sell-side licking their chops. My feeling with Nvidia today is not too different from when the bank cartel took down Bitcoin.
Now is the time for the sell-side to be extra cautious with Nvidia.
The decision as to when to sell is yours to make. Only you understand your financial circumstances and risk tolerance.
For guidance, here’s what I’d do. Monitor the NVDA 30-minute and Hourly Technical Analysis at Investing.com. Along with technical indicators like RSI, MACD, TSI, CCI, and others, you can base your decision on facts.
https://www.investing.com/equities/nvidia-corp-technical
NVDA Daily data chart. Note the arrow is at the S2 level.
https://tvc-invdn-com.investing.com/data/tvc_dd831f963c18481e08cffb7cf33c1128.png
