Skip to main content

NVIDIA (NVDA) Topping? Stock Chart Review

NVIDIA (NVDA) shares have struggled to regain their former highs above $120. Has this new tech leader topped out or is the stock merely catching its breath and consolidating? 

NVDA is currently trading around $100 after falling back below its 50 day moving average. The stock is currently down -6% YTD.

NVIDIA stock NVDA price chart technical analysis


As you'll note from the chart annotations (click chart to enlarge), this is the second time the stock has dipped below the 50 day MA since topping out in early February. 

The stock made a short-term top at the end of 2016, with a bearish engulfing bar (the long red bar/candle on December 28, 2016). This down day marked the start of a brief decline, after which NVDA climbed back to challenge its former high. The stock failed to hold above the $120 level and quickly dropped back below its key moving averages.

I should note that NVDA pulled back sharply below its 20 and 50 day MAs back in early 2016. The stock soon bounced back and went on to make multi-year highs as it ran from $33 to $120, a nearly four-fold gain in one year.

The question is, do we see signs of a renewed uptrend coming on the heels of the advance we've just witnessed? With NVDA currently sporting a $59 billion market cap and fellow chip leaders like AMD and QCOM struggling lately, I will tread lightly here.  

Until I see renewed buying strength and a resumption of the upward trend, I will avoid buying the stock outright. NVDA is either in the process of consolidating or entering a decline. Until I get more information, I will focus on stocks with higher potential for upside.

While I don't own NVDA as an individual stock, I do own the shares indirectly via the semiconductor ETF, SMH. So while I'm realistic and cautious about a potential decline in NVDA, I'll be happy to see the stock firm up and move higher in the coming weeks. If the trend moves against me, I have a predetermined sell order (stop loss) in place for SMH.

Related posts

Chip Stock Rally Broadens: NVDA, AMD, BRKS, SMH Charts.

Subscribe to the free Finance Trends Newsletter - you'll get actionable trading ideas and valuable market insights sent to your inbox. You can follow our real-time updates on Twitter.   

Popular posts from this blog

Seth Klarman: Margin of Safety (pdf)

Welcome, readers! Signup for free email updates at the Finance Trends Newsletter . Update: PDF links removed due to DMCA notice. Please see our extensive Klarman book notes below. New visitors, please check the Finance Trends home page for all new posts. Here's something for anyone who has been trying to get a look at Seth Klarman's now famous, and out of print, 1991 investment book, Margin of Safety .  My knowledge of value investing is pretty much limited to what I've read in Ben Graham's The Intelligent Investor (the book which originally popularized the investment concept of a "Margin of Safety"), so check out the wisdom from Seth Klarman and other investing greats in our related posts below. You can also go straight to Ronald Redfield's Margin of Safety book notes .    Related posts: 1. Seth Klarman interviews and Margin of Safety notes     2. Seth Klarman: Lessons from 2008 3. Investing Lessons from Sir John Templeton 4.

Slate profiles Victor Niederhoffer

Slate's recent profile of writer/speculator, Vic Niederhoffer has been getting some attention from traders and finance types in recent days. I thought we'd take a look at it here too, to offer up some possible educational value from Vic's experiences with trading and loss. Here's an excerpt from Slate's profile of Victor Niederhoffer : " I've enjoyed getting your e-mails. It sounds like you've thought a lot about being wrong. Well, the reason you contacted me, to call a spade a spade, is that I'm sort of infamous for having made a big, notorious, terrible error not once but twice in my market career. Let's talk about those errors. The first was your investment in the Thai baht, which pretty much wiped you out when the Thai stock market crashed in 1997. I made so many errors there it's pathetic. I made one of my favorite errors: "The mouse with one hole is quickly cornered." That is key. There are certain decisions you make in li

Moneyball: How the Red Sox Win Championships

Welcome, readers . T o get the first look at brand new posts (like the following piece) and to receive our exclusive email list updates, please subscribe to the Finance Trends Newsletter .   The Boston Red Sox won their fourth World Series title of t he 21st century this we ek. Having won their first Se ries in 86 years back in 200 4, the last decade-plus has marked a very strong return to form for one of baseball's oldest big league clubs. So how did they do it? Quick background: in late 2002, team own er and hedge fund manager, John W. Henry (with his partners ) bought the Boston Red Sox and its historic Fenway Park for a reported sum of $ 695 million. Henry and Co. quickly set out to find their ideal General Manager (GM) to help turn around their newly acquired, ailing ship. This brings us to one of my fav orite scenes from the 2011 film , Moneyball , in which John W. Henry (played by Ar liss Howard) attempts to woo Oakland A's GM Billy Beane (Brad Pi