As the AI hype gets bled out of the markets and the sexy mega cap tech stocks take a beating, if we assume that the stock market has one more up leg left in it, buying opportunities are arising.
Here is the daily chart setup for NVDA, which has had a decent decline and is down hard today. The media (Barrons) are assigning reasoning of investor skittishness about AI competition. But the chart does not care about that. The chart cares that the stock has already pulled a 50% Fib retrace between the high and the launch point off of the support shelf formed from March through May.
The price is nearing a 62% pullback and while it’s at it, why not test clear support in the low/mid 90s and fill a gap? A note on gaps: Often they don’t fill as we TAs sit and wait en mass for just such an event. That could be interpreted as a breakaway gap with no immediate need to fill, as it broke the consolidation, established a new trend and it came on volume.
Again, this all assumes the stock market is only taking a healthy mid-summer correction. If so, this is a clear buying opportunity. If not, a mental or actual stop loss to suit risk tolerance below support should be used. As a side note, the rising 200 day average (orange) can also be tested within an intact bullish trend. But the stock is already becoming oversold at this time.
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.
