Know what you should do with Nvidia ($NVDA)? Nothing! – February 2, 2024
Dan Fitzpatrick at StockMarketMentor.com. I want to talk about NVIDIA ( NASDAQ: NVDA ), yet again. Because the thing still just continues to give us more and more reasons to talk about it.
Hopefully, you were doing this trade, we’ve been in for a while. You should be holding some over earnings. I don’t think anybody would ever be wise, any kind of a trader, to hold a full position over earnings. If you’ve got a stock like this, that’s doing so well, you always want to have a little something, just keep a little bit of something.
NVIDIA ( NASDAQ: NVDA ) was awesome after this. They don’t have earnings yet, they still have a couple of weeks to go. This stock is just going up because it’s going up, that’s it. Hopefully, you are still long from back here. I had said that 700.00 is pretty much in the bag, and I believe that it is, and I would say, not in a straight line.
The way this thing is looking, maybe it’s going to be in a straight line. I’m doing this 2 ½ hours after the market closed. Even on Friday, people are still banging it around a little bit. This is what to show you, we had a recent 506.00 entry, with a real tight stop at 489.00, so that was our risk.
Then I went and calculated all of these “R” values, like we’re risking this much so we want to make twice that much to get R2 or three times that much to get R3. And 3R, which is a good risk/reward, that’s pretty good. You’d like more but I’ll take it, I’ll take these all day long, that gets you up here.
Well, this thing has just continued to go. And so what I wanted to show you was this, this stock, and you can really see it in spades on SMCI ( NASDAQ: SMCI ), but I’m not going to go there right now. The stock runs up here and then it looks like, on this day, that’s going to be the end, it’s going to pause and all that, and it did.
You would look at this level here at 628.49, so we’ll call it 630.00. You look at 630.00 as the high, then the stock is going to drift around, and it does. Then it comes here, and it hits 630.00, actually up a little bit high, but then again, it traded a bit lower. The point is, as you are looking at this chart you’re seeing 630.00 as strong resistance, that should hold.
That should be the top, right there, 630.00, a heck of a move, 630.00 is the high. That would be the rule, that’s what you’re thinking. But then all of a sudden no, the stock gaps up to 640.00. So what just happened? The stock did something that it wasn’t supposed to do, it broke the law. It jumped up above 630.00 and didn’t even look back.
So what’s your takeaway on this? Your takeaway is this, when you think the stock should be weak, when it seems like this move is pretty much done and then the stock keeps going, that tells you that this move is ongoing. We look at the weekly chart, these are lines that I’d drawn a while ago. Just saying, that I could see this stock as it pops out of the squeeze doing a little jigsaw, a little zigzag here, but then ultimately reaching the 700.00.
Well, this is how strong the stock’s been, it really hasn’t zagged, it’s just been zigging all the way up. My suggestion is look, you just stay long the stock. Keep your trailing stop if you’re a little skittish. Keep your trailing stop just below this prior day’s intraday low, so right here. As long as the stock stays above this line, then you’re good. If the stock pulls back and closes, say, below 600.00, which by the way, is a 10 percent pullback, that’s what happens.
If a stock does that, then it’s something that you’re going to need to take care of and get the heck out of there. But this is a weekly chart, I don’t think you’re going to see the stock fall this low. So my suggestion is to stay long NVIDIA ( NASDAQ: NVDA ). Just stay long the stock and you’re gonna do fine.
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