Nvidia Price Forecast – Nvidia Continues to Defy Gravity

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NVIDIA Technical Analysis

Taking a look at the Nvidia chart, you can see that the market gaped right away during the Thursday session, which makes quite a bit of sense considering that the earnings were an absolute blowout. And if you watched my video yesterday pre-market, I said that we’re going higher. I had no idea how much higher we were going to go, and I certainly would not have guessed 16.23% for the day. That is a pretty decent return for most money managers over the course of a year. So obviously they’re going to try to milk this thing for everything it’s worth.

Had you bought at this double bottom here all the way to the top you’ve just about doubled your money. So, at this point in time, you begin to decide whether or not there’s anybody left to buy. And in fact, this year, it’s a 66% gain. Now, at the end of the year, that would be impressive, but before the end of the second month of the year, that’s a bubble. It doesn’t mean that Nvidia is going to crash anytime soon, but please be aware of the fact that Nvidia is, without a doubt, a bubble.

This is the poster child for passive investing. Everybody is buying the same handful of stocks. And in fact, if you ever take the time to look at a non-weighted index like the S&P 500, it becomes obvious that there’s just a handful of stocks that are driving everything. And that’s true in all indices. It’s not just the NASDAQ or the S&P 500.

So, with that being said, obviously, there’s only one direction you can trade, but you have to be very cautious. You have to find some type of value and it’s going to be difficult in this market because of this huge gap. In theory, the gap is support all the way down to 675, so about $100, which would be a big drop, obviously. So I think most people will look at the top of the gap at 743 and some potential entry point, assuming that they’re even going to let it fall. And that’s the other thing too, you have to be very cautious. I cannot stress enough how overdone this chart is.

You see this from time to time, and generally it ends up pretty poorly for those who jump in late. The question is when is late? The pundits on Wall Street will tell you how Nvidia is a new thing and yada, yada, yada, AI, it’s got all the right buzzwords, but their job is to tell you to buy stocks. So you have to keep that in mind as well. At this point in time, I would not be concerned about the trend though until we dropped basically 20% to the $666 level, which is basically where the support was found.

All things being equal, this is a market that desperately needs some type of pullback, and it will ironically probably come from other companies suggesting that AI is slowing down, but right now, this is the go-to for everybody. The next stop, more likely than not, will be the $800 level.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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