$NVDA finally broke out above $140 on decent volume. Here’s your trade! – October 21, 2024
Dan Fitzpatrick here at StockMarketMentor.com. Let’s look at my Fitz In Five today. Yet again, it’s NVIDIA ( NASDAQ: NVDA ).
I’ve got several other trades going on that work pretty well, that are working really, really well, but I want to come back to NVIDIA ( NASDAQ: NVDA ). I’ll say it again, my timeless price target on this is $200.00. I get that from various measured moves, measurement of bases, measurement of prior runs, etcetera, etcetera.
I won’t say it’s proprietary necessarily, it’s just the way I do things. I’ve got a pretty hefty price target up here that’s about 30, 35 percent higher than the current range. But this is why I’m going over this today. This was a pretty significant move higher, $140.00 has been some pretty formidable resistance.
If we look here, this is 140.00, I’ll go ahead and snap a line there, roughly right there. So $140.00 was a really, really tough area, and if we zoom out you can see it was tough here. This stock has really been struggling to break through $140.00. It flirted with it a little bit last week on Thursday, actually on this prior day as well on Monday.
But now, finally today, it’s broken out. Volume was only average, though I don’t know, 262 million shares, which seems pretty good to me. But what I like about it is that 140.00 is such a formidable resistance area, that to get above this pretty much decisively by almost $4.00, that’s a pretty good indication. By the way, as I record this, the thing is still moving a bit.
So why is this stock moving so much? Well, I think it’s because Jensen Huang said demand for their GPUs is crazy magical off the charts, whatever it was. But he just said it’s nuts, and that’s a big deal. Also, you’ve got stocks like Microsoft ( NASDAQ: MSFT ) coming up in nine days for earnings. And you know that they’ll be talking about how much money they’re spending on that. You’ve got Meta ( NASDAQ: META ), Zuckerberg’s evil empire, on October 30th, as well.
So you’ve got these companies that are reporting really, really soon. One of the things they’re going to be talking about is AI and how much money their spending. And so, I think the market is starting to anticipate that these companies are going to be saying something like, OMG, we’re spending a ton of money on AI stuff and NVIDIA ( NASDAQ: NVDA ) is kind of good.
The Market is starting to really anticipate that and push this higher. This is another reason though, why I really like it. Now, these types of squeezes down her don’t happen very often, if only they did. But when this happens, this tends to give us a pretty good move. This is a different pattern here, and it almost looks like this type of thing. It’s like a flat triangle that the stock is just now breaking out of.
From a technical standpoint, this is really interesting. But I want to show you something else, and this is why this is such an interesting chart to me. I’ve got this moving average matrix, you can call it whatever you want, you can see all the moving averages here. You’ve got the Bollinger Bands, the 20-day, the 200, 50, 10, 30, 40, 60, 70, 80, 90, 100, 150. So you’ve got all these moving averages of varying degrees.
If you look back here at the ways these were trading, these were really, really clustered very close together. They were also clustered really, really close together here, and also here, and then back here. So when these moving averages are clustered very close together the setup is explosive. Now, before you get too lathered up about this, you also have to notice that these moving averages are all drifting sideways.
It’s really the same thing here, they’re drifting sideways, back here the same thing. I’m not going to go into a lot of detail, we’ll just say they’re drifting sideways. In subsequent little consolidations like back here in October, you can see they weren’t really drifting sideways, per se, right here. They’re still pretty close together but they’re not really drifting sideways. Here though, they were.
So we see these big explosive moves when these key moving averages are pretty close together. Now, I would classify this as an explosive move as well. And these key moving averages were pretty close together. So what’s the difference? Well, flat moving average clusters, base, base breakout. Steeper moving average clusters, when they’re closer together, that’s a continuation move.
And so where are we right now? I’m looking at this and I’m seeing these things all pretty close together. They’re fairly flat, but I’d say starting to just drift sideways. This is the 100-day moving average, this one here and it’s been moving upward for a while. So I’m looking at this as more of a continuation move. But with all of these moving averages clustered together, this really takes all the noise out of the market.
It takes away all of this noise, all this stuff up here because all we really care about are the closes. And so if you take away this stuff and just really focus on the moving averages, you’ll see that the real range and this is art more than anything else, maybe it’s bad art, but you can look anywhere from 115.00 up to 130.00. Something like that is where I would call the real range and we’re just starting to break out and squirt out the upside.
I like this, I like the fact that they’re not reporting earnings, I believe they were supposed to be on the 20th, as opposed to the 19th of November, but it doesn’t really matter, they’re about a month away. The way I see this is, that this thing is just getting going. I’ve been pounding the table on NVIDIA ( NASDAQ: NVDA ), not really pounding it, I was back here, but I’ve been saying I think this stock, once it breaks above 140.00, is going a lot higher. I’ve been saying that since back here, but it hasn’t broken above 140.00 until today.
I’m looking at this and I see much higher prices to come. My suggestion is, if you’re not in this, maybe now is the time to get in. It might have been, unless you’re a real tight swing trader, it might have been putting your feet to sleep a little bit because the stock’s kind of been trading in a choppy range. But now, with this uptrend continuing, I think there’s a lot of money to be made in NVIDIA ( NASDAQ: NVDA ), even now. And remember, this isn’t just about GPUs, this is about the AI industry.
So it’s more than just about NVIDIA ( NASDAQ: NVDA ), it’s about an entire industry. So if you think AI is in its earlier stages, then you’ve got to look at NVIDIA ( NASDAQ: NVDA ) in a totally different way than just looking at what its market cap is, and how many GPUs it can sell. This is kind of a big deal and I want you to be there. Just make sure you use stops. Make sure you’ve always got your risk defined.
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