Here’s your trade on Nvidia ($NVDA) – September 25, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I am looking at Micron ( NASDAQ: MU ) today.
Before they reported earnings, that’s what it looked like, not even up 2 percent. Then you tack in after hours, after a really good number, and we’ve got more than a 15 percent move on the day. But it’s right up to this resistance level at 110.00.
I have no idea whether it’s going to continue to break through tomorrow, it could go either way. I don’t tell fortunes, and I don’t make predictions, but I do look at market prices and compare them to stuff that I’ve seen for the last few decades. A stock that’s up 15 percent, and bumping right up against resistance, isn’t really likely, it could happen, but it’s not really likely to continue higher.
If you are one of those who really want to get in on the action before everybody else catches on, everybody’s already caught on. I think you’re way late to the party. I would absolutely not short a stock like this. Don’t short this kind of move. This is really what you’re looking at here, this W pattern. Sometimes you can have an old triple W or maybe a move like that and then ultimately a move higher.
I’m talking about just from a trading standpoint, I don’t think this is a good trade for you to make. You can see this stock has been volatile, it’s in a nice uptrend. But starting in July the whole trend reversed, the fortunes just reversed. The 21-day moving average, bam. The 50-day moving average, bam. The 200-day moving average is basically flat now. And if this stock stays in this trading range for a while, as these price points droped off 200 days ago, you’re going to wind up seeing the 200-day moving average rollover.
So this has been a huge change of fortunes in Micron ( NASDAQ: MU ). But what it is doing is, it’s bringing in the whole semiconductor space up with it, which is why we see most of these stocks up after hours. It’s not because they did anything big, it’s because Micron ( NASDAQ: MU ) reported some strong earnings.
That leads me to NVIDIA ( NASDAQ: NVDA ). NVIDIA ( NASDAQ: NVDA ) is a stock that we have on our Active Trade List. I didn’t get a great entry on it, we’re up a little bit but not much to crow about, in fact, I’m kind of hanging my head in shame, we should be better off. This is a stock that, this was the low, this is the Yen carry trade disaster. Then we got a higher low, we’ve got these lower highs that are just kind of pinching, now, together.
This is kind of a volatility contraction pattern, and it’s just starting to test this down-trending line here. I suspect we’re going to get another $6.00 on this. I think it’s probably going to test 130.00. Whether it goes above that, no telling. I had always felt and was very vocal about this, that 140.00 would have been a good price for this to rest. And of course, that’s exactly what happened here.
This stock has essentially, other than this one day, has essentially traded in this $40.00 range, from 100.00 up to 140.00, really kind of 130.00. And so it’s really trapped. I think the best thing, the healthiest thing for this stock would be for this to grind sideways. I’m not really looking for this kind of move higher, though, if we get it I’ll take it.
What I’d really like to see is the stock drifting around for a while, taking profits, institutions gradually buying the stock, soaking it up a little more. And then as we start heading into earnings, which for them will be on the 19th of November. That’s when I think we could start seeing a move to new highs.
I’m not predicting it, I say this all the time because it’s true all the time. I just want to make this clear, I don’t have a price target on this that I’m going to trade off of. I’ve said before, that if it breaks 140.00, I think the next logical level would be up to 200.00. That would make this a mega monster cap stock.
But if the AI space continues to grow, and this is important, and NVIDIA ( NASDAQ: NVDA ) can show (they’re going to have growing revenues, no question about it), they’ll have to show, not only that their revenues are growing, but their growth is actually accelerating. It’s like each quarter versus the prior year, and actually even the prior quarter, each quarter just gets better, and better, and better at a pretty high rate.
So this thing has a real tough row to hoe. But if it can break through 140.00, I think it can get there. First, though, it’s got to break through 130.00. So if I were you, that’s when I would be watching this really, really carefully. If you’re long, and I’ve got a bunch of calls on it, I’ll be looking to unload those when it gets to 130.00, just to do a Steve Miller, take the money, and run, at least most of it, and then we’ll see what happens.
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