Here’s your trade on Nvidia ($NVDA) – November 20, 2024
Dan Fitzpatrick here at StockMarketMentor.com. NVIDIA ( NASDAQ: NVDA ) is what we’re looking at today.
Let’s look at NVIDIA ( NASDAQ: NVDA ). This is what the stock looked like during regular hours. It’s not a whole lot different than the way it is now, only this is bigger. It’s a wider range but the stock is still up towards the high end of that. You can see it’s lower here but it’s the same general thing.
The stock is trading right now just 2 percent below where it closed yesterday. I look at this as a nothing-trade. Even if you were looking and buying it here at $140.00 on the way up, you’re only making 4 percent, and this with your hair on fire. Buying it not just right at the low but theoretically taking about 4 percent out of this trade after hours can be a tough trade. Tomorrow we’ll have a better clarification on that.
This is what I would suggest, first of all, their guidance came in. It was awesome guidance but it came in a little light. They beat on just about everything. But here’s the thing with these published expectations, they beat estimates, they beat this and that. Those are just published things, but sometimes it’s an earnings beat, it’s a revenue beat, and the stock still goes down.
And you say, Well, how could that be, it beat all these estimates? Aren’t people surprised? And the answer is, Well, obviously not, otherwise they’d be buying the stock. And so you want to keep in mind that all these estimates, these are done by analysts. These are done by the sharpest people on the block, who get paid a lot of money for analyzing stocks but they can’t trade worth a darn.
You get all these estimates, but they don’t really mean too much. They’re kind of a general reference for what the company will do. But I will say this, “They tend to be pretty close most of the time to what the company does.” But to me, that’s really not an edge because if a company reports earnings that are in line with estimates, well, that kind of stuff’s already baked into the price of the stock. You’re not going to see that.
With respect to that, I don’t care what the estimates are. I couldn’t care less. After the fact, now I want to see what the stock is doing. And you may, if you feel like it, attribute that to, oh it beat estimates. Or, oh it missed estimates. I just see that the stock has really popped. Well, that must mean there’s stronger demand for the stock. There are more aggressive buyers than sellers. Or oh man, the stock dropped a lot.
That must mean sellers are really, really eager to unload the stock; buyers aren’t really eager to buy it. If you are just looking at something like that in a real binary way, then you’re also set to identify the reversal, to identify when a stock is done going down, or when it’s done going up, if all you’re looking at is the balance of aggressiveness between sellers versus buyers.
You can see that in the way stocks trade. So we’ll have to look and see what NVIDIA ( NASDAQ: NVDA ) is doing. But for those of you who are neophytes, this is really what I’m looking for. Before I would be committed to any kind of an upside breakout buy, I need to see the stock run up above 150.00 and hold there.
From what I’m seeing in the price action now, I seriously doubt that that’s going to happen. I think that this stock is going to wallow a little bit from what I’ve seen. The numbers are great, and they’re great enough to where they’re not going to scare out a lot of shareholders here. I think we’ll probably just get some sideways consolidation.
I will say this, stay away from this stock unless it breaks out above 150.00. And on the downside, you’ve got to look at the 50-day moving average as your reference for support. If this stock were to fall to the 50-day moving average, that’s really where you want to buy the stock, right down here.
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