NVDA Stock - Has NVIDIA Topped Out?

Summary

In this Nvidia daily update, the speaker analyzes the stock’s recent 2.5% pullback and the possibility of a top or a bear trap. He examines key technical indicators, including the 9 EMA, MACD, and stochastic, highlighting resistance levels around $174-$176 and potential downside targets near $169 and $150. While cautious of a 'dead cat bounce,' the speaker anticipates a short-term recovery if Nvidia surpasses key resistance. The options flow, including large out-of-the-money puts, signals a potential sharp selloff. Overall, the outlook is mixed with emphasis on monitoring key levels for the next move.

Takeaways

• 😀 Nvidia stock is currently experiencing a pullback, down by 2.5% to about $173-$174 per share.
• 😀 There's uncertainty about whether the pullback signals the top of the stock or is just a temporary bear trap.
• 😀 The stock has closed below the 9 Exponential Moving Average (EMA), which could indicate a new resistance around $174-$175.
• 😀 The price action shows signs of potential trend reversal with lower highs and lower lows, raising concerns for future performance.
• 😀 Immediate downside support is at the 21 EMA around $169, followed by potential support at $165 if the downtrend continues.
• 😀 If the stock loses the rising channel, a larger pullback to the $150-$140 range becomes possible.
• 😀 The MACD is showing a bearish crossover at historically elevated levels, a pattern to watch closely for further downtrend confirmation.
• 😀 Stochastic indicators are still holding up but could signal further bearish momentum if they drop below 60.
• 😀 While a short-term bounce to around $180 could occur, it may be a 'dead cat bounce,' leading to further declines afterwards.
• 😀 Aggressive put buying activity indicates that some traders are betting on a sharp decline in the near future, with large positions in $177.5 and $143 puts.
• 😀 Despite some caution in the short term, a retracement to previous all-time highs in the $150s could provide a buying opportunity for long-term investors.

Q & A

What is the main topic of this Nvidia daily update video?

The main topic of the video is an analysis of Nvidia's stock performance, including potential trends, resistance levels, and market outlook.

What concerns are raised about Nvidia's stock in the video?

Concerns include the possibility of a stock correction, whether the current decline is a healthy pullback or a bear trap, and the potential for further bearish momentum based on key technical indicators.

What key technical indicators are discussed in the video?

The video discusses the 9 exponential moving average (EMA), the 21 EMA, the MACD, and the stochastic oscillator. The loss of key support levels and bearish crossovers are highlighted as potential signs of further downside.

What level is considered a key resistance for Nvidia's stock?

The resistance level identified is around $174 to $176.6, with the 9 EMA also turning into resistance.

What is the potential downside target for Nvidia if bearish momentum continues?

The downside target is approximately $169 for the 21 EMA, and if the stock continues to decline, a revisit to the bottom of the rising channel near $165 or even the low $150s is possible.

What is the significance of the 50 EMA in the analysis?

The 50 EMA is a key support level. If Nvidia loses the 9 and 21 EMAs and the stock continues to fall, it could revisit the 50 EMA, which may signal a retest of previous all-time highs in the low 150s.

What is the 'dead cat bounce' mentioned in the video?

A 'dead cat bounce' refers to a temporary and brief recovery in a downtrend, where the stock may bounce up but is expected to fall again after the short-term rally.

How does the video describe the potential market reaction to Nvidia's stock in the short term?

The video suggests that if Nvidia breaks above $176.6 and reaches around $180, it might trigger bullish sentiment among traders, only for the stock to potentially reverse and trap those who expect further upside.

What scenario does the video propose as the ideal for Nvidia's stock performance?

The ideal scenario would involve a bull flag pattern, where Nvidia consolidates into previous all-time highs before making another move upward, maintaining long-term bullish momentum.

How does the video interpret the weekly chart and volume analysis?

The weekly chart shows some resistance at the upper end of the range, and although the MACD hasn't printed a lower high yet, the volume during the price movement has been decreasing. A bearish candle with increased volume could indicate potential bearish sentiment.