NVDA Stock - Crucial Levels For NVIDIA

Summary

In this Nvidia daily update, the speaker discusses recent stock movements, focusing on Nvidia’s performance, market conditions, and potential risks. They analyze technical indicators like the MACD, SMI, and moving averages to gauge the stock’s future direction. Despite some bullish signs, the speaker expresses caution due to mediocre risk/reward ratios and possible bearish signals. They also note strong bullish options flow, particularly for July 11th, which adds uncertainty. Overall, the speaker remains patient, awaiting better entry points, especially around the $130 level, while keeping an eye on market developments.

Takeaways

• 😀 The video discusses the current state of Nvidia's stock, its potential future movements, and technical analysis of the stock.
• 😀 The presenter warns that despite a bullish trend, the risk-to-reward ratio for Nvidia stock is mediocre at the moment, making it an unappealing investment opportunity.
• 😀 A potential bearish scenario is highlighted due to the stock's loss of the 144 support level and the appearance of bearish divergence on the MACD.
• 😀 The presenter emphasizes that Nvidia is still holding above key support levels, such as the 8 exponential moving average, but technical indicators are showing caution.
• 😀 A bearish crossover on the MACD is noted as a red flag, signaling possible downside, particularly with ongoing bearish divergence on the stochastic momentum index (SMI).
• 😀 A key low at $141 is highlighted, and if it breaks, it would signal a potential shift in market control from bulls to bears.
• 😀 The weekly chart is showing questionable candles that may indicate potential topping, but it remains unclear whether this will result in a reversal.
• 😀 The presenter mentions that if the price drops to around $130, they would become more interested in Nvidia, as it would present a better risk-to-reward opportunity.
• 😀 Despite technical concerns, bullish options activity (with large call volumes for July 11th 130-strike options) creates a conflicting signal, suggesting possible positive news or an unexpected move for Nvidia.
• 😀 The video concludes with a cautious stance, recommending patience and waiting for clearer signals before making investment decisions, as the chart remains uncertain.

Q & A

What is the overall stance of the speaker on Nvidia stock?

The speaker is cautious about Nvidia stock. While there are some bullish signals, the risk/reward ratio is considered mediocre, and the speaker is waiting for clearer signs before making any investment decisions.

Why does the speaker consider the risk/reward ratio for Nvidia stock as mediocre?

The speaker believes that while there is some potential for upside (around 1.5-2% to $147-148), the downside risk is more significant, potentially losing 3-4% or more, particularly down to $140. This imbalance makes the risk/reward unappealing.

What are the technical indicators mentioned by the speaker that signal caution for Nvidia?

The speaker points to a bearish MACD crossover, bearish divergence on the stochastic momentum index (SMI), and the loss of a key trendline as potential warning signs for the stock's future performance.

What does the speaker say about the recent price movement in Nvidia stock?

The speaker notes that Nvidia has been relatively flat recently, with a small dip of 1.2%. However, the stock is at an interesting spot, potentially indicating a false breakout after reaching a bullish close above $145, but with some risk of further downside.

How does the speaker view the importance of the $141 level for Nvidia?

The $141 level is significant for Nvidia as it represents a key low that helped push the stock to new highs. If this level is lost, it could signal a break in structure, allowing bears to take control and lead to further declines.

What potential bullish pattern does the speaker see on the weekly chart?

On the weekly chart, the speaker sees potentially bullish patterns such as a Doji or inverted hammer candlestick, which could signal a reversal. A pullback toward the 21 EMA around $130 would be considered bullish, setting up a possible bull flag.

How does the speaker interpret the large call options activity in Nvidia?

The speaker is conflicted by the large, aggressive call options flow for July 11th, particularly the $130 strike. This is seen as unusually bullish and could indicate insider knowledge or an upcoming event, making the speaker second-guess their cautious stance on the stock.

What does the speaker say about the possibility of Nvidia pulling back to $130?

The speaker suggests that a pullback to around $130 could actually be very bullish for Nvidia. This would create an opportunity for a potential bull flag setup, and the stock would be much more appealing at this price level compared to its current range.

What role do the exponential moving averages (EMAs) play in the speaker's analysis?

The speaker mentions that the 8 EMA on the daily chart and the 21 EMA on the weekly chart are key levels to watch. The stock is currently holding above the 8 EMA, but if it loses that level or drops further towards the 21 EMA, it could trigger bearish signals.

What is the speaker’s target for Nvidia in the short term?

The speaker’s short-term target for Nvidia is around $147-148, assuming a bullish continuation. However, they emphasize that this target has a limited upside with significant downside risk, making it less appealing as an entry point.