NFTRH+; A Semi leader makes a break

This update works as a ‘plus’ update on NVDA as well as a sector beacon for the Semis in general and as a side note, a possible warning flag on the counter-cyclical gold sector. Let’s check out the daily chart and then make some notes.

A key gap was filled in late February (there are others well lower that I am not going to be concerned with at this time) and a support area held. Now NVDA is above the moving averages after breaking a sharp downtrend. Resistance is at and just above 270.

nvidia stock

Notes

  • Recall that we used sexy Semi leaders NVDA and AMD to view a negative leadership divergence to the Semi sector back in Q4 2021. If the bounce is real – as opposed to FOMC week shenanigans – NVDA could be leading the Semi sector in the other direction.
  • Its valuation is rich, but there is a case for a renewed growth stock rally if long-term yields top out around our 2.5% to 2.7% target on the 30yr. Recall that growth started getting hammered as the market began to become conscious of the rise in long-term yields.
  • I added NVDA and increased the position at an average of 243, but a pullback to the 244 area could be a buy opportunity, if interested.
  • The greater value to me is as a sector beacon for the Semis, secondarily for growth stocks and insofar as Semi is still a good economic cycle indicator, a potential warning for the counter-cyclical gold stock sector if indeed Semi recovers and if indeed it leads the wider economy (recall that we have noted Semi is now more pervasive and less cyclical than the bad old days of personal computers or bust).

Please do not overreact to that last bullet point. My job is to dig up and explore options ahead of time, not to make crystal ball predictions. In 2013 we had to put a final nail in the gold stocks’ coffin in large part due to the Semi cycle that was just getting started. Today there are different dynamics in play and I doubt Goldilocks is in the offing. So maybe the chart above, if it continues to go bullish is a reflection of the anticipated stock rally due to terribly over-bearish sentiment, whether or not a bear market is actually beginning.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the technical parameters are already noted. These updates are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason) as I often do. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.