Here’s your trade on Nvidia ($NVDA) – November 6, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to look at NVIDIA ( NASDAQ: NVDA ) today.
First, we’ll start with the weekly chart. You see how the stock has been zigzagging up here. This 140.00 level really was some pretty formidable resistance. It had bumped up a little bit, 144.00, something like that, and then it’s been farting around here for the last month or so.
We saw a pretty big move today, which I’ll get to in just a sec. But note that, over the last month or so, as the stock was consolidating sideways, this volume had been trending lower a little bit, and that’s not a bad thing.
I don’t mind seeing a stock trading sideways with declining volume because that reflects an absence of real, real concerted selling. It’s not like everybody’s rushing to get out of the stock, so this was actually a good sign. We’ve had this on our Active Trading List for a while now and we’ve got a nice position in this.
If we look at this on the daily time frame, you can see how it had been trading in this kind of a trading box, about here from, 135.00 up to 145.00ish. And then finally today, the stock gapped up along with the rest of the market on kind of a relief rally. I don’t think it’s a relief rally, let’s just say a clarification rally.
The Market doesn’t like uncertainty, and the guy wearing my shoes was very, very surprised that we had a result. I’m not talking about one way or another, but that we had a result in the election on Election night, that typically does not happen. I think the market was relieved that it did. Now we’ve got a lot of stocks running across the board.
I’m trying to feature NVIDIA ( NASDAQ: NVDA ) here. The thing about this, which is cool is we see this stock trading sideways to down, and then back up here. And so now, I see this here as kind of a handle. This is a long-term cup and handle and it suits all of the criteria of Bill O’Neil’s cup and handle, even including on this pullback we’ve got this on lighter volume.
I like the way this stock is trading here. And I like the breakout, I like the breakout on heavier than average volume. So as I see this, this is a buy right here, right now. I think this works, I think it’s going to work really well.
I have a pretty big position in this and NVDL ( NASDAQ: NVDL ). My secret target for NVIDIA ( NASDAQ: NVDA ) is right up here, not tomorrow, not this month, maybe next month, maybe next year. But ultimately, I think this thing goes another 30ish, 35 percent higher, just based on the strength of the AI industry.
Not necessarily, though certainly, it has a huge part, the fact that NVIDIA ( NASDAQ: NVDA ) is the leader in that industry but just the growth of the industry itself. I like this stock, I like it here. I think your main question is not whether you should buy it, but how much you should buy. And why is that? Because you want to be looking at what your risk is.
So where are you going to stop? Where’s your protective stop going to be to keep you from losing too much money if the stock pulls back? If your position is too big what’s going to happen is, you’re going to get freaked out if the stock pulls against you.
I struggled with that for a while. I don’t struggle with that anymore because I really, really manage my position size, and it helps me stay in good trades during pullbacks. That’s an important thing for you to be mindful of.
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