Followers | 680 |
Posts | 141098 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Friday, December 28, 2018 11:20:04 AM
By: TheStreet | December 28, 2018
Nvidia is a buy on weakness to its "reversion to the mean" at $118.60 and to its annual value level at $115.61 as its momentum reading is so oversold it's "too cheap to ignore."
Nvidia Corporation (NVDA - Get Report) is a buy on weakness to its "reversion to the mean" at $118.60 and to its annual value level at $115.61 as its momentum reading is so oversold it's "too cheap to ignore".
Nvidia was one of the strongest momentum stocks since February 2016. The stock was up 11.8-fold from $24.75 during the week of Feb. 12, 2016 to its all-time intraday high of $292.76 on Oct. 2. Since the high, the stock has plunged by 55.2% to its 2018 low of $124.50 set on Dec. 24.
Nvidia is an important semiconductor stock as it provides chips used in gaming applications, which had been the important driver during the momentum run-up for the stock. Data centers had become a faster growing segment in recent quarters. Other segments include automotive, original equipment manufacturing and its intellectual property. The company may face downward pressure on GPU prices, which could impact fourth-quarter earnings.
The stock is reasonably priced with a P/E ratio of 18.44, not bad for a momentum stock. The company also offers a token dividend of 0.50%, which makes the stock a portfolio choice for equity money managers who only buy stocks that offer a dividend.
Remember that demand for semiconductors is an important economic indicator as almost every electronic product we buy contains computer chips - from your smallest handheld device to the automobile you drive.
The Daily Chart for Nvidia
Courtesy of MetaStock Xenith
The daily chart shows that Nvidia began 2018 with continued strong upside momentum which stalled on a dime after setting its all-time intraday high of $292.76 set on Oct. 2. As the stock began its bear market slide a "death cross" formed on Nov. 13. A "death cross" occurs when the 50-day simple moving average falls below the 200-day simple moving average and indicates that lower prices lie ahead. The stock traded back and forth around the center horizontal line which is my semiannual pivot at $212.29 between Oct. 24 and Nov. 7 as the moving averages were converging. On Nov. 15, the company missed analysts' estimates and the stock gapped lower on Nov. 16. This provided the negative catalyst for the decline to the 2018 low of $124.50 set on Dec. 24. My weekly value level is at the base of the chart at $123.19.
The Weekly Chart for Nvidia
Courtesy of MetaStock Xenith
The weekly chart for Nvidia is negative but oversold with the stock below its five-week modified moving average of $161.09 and approaching its 200-week simple moving average or "reversion to the mean" at $118.60, which is a buy level. The 12x3x3 weekly slow stochastic reading is projected to end this week slipping to 9.11 down from 11.41 on Dec. 21. The stock is not only below the oversold threshold of 20.00 but it's also below 10.00, which I describe as a stock "too cheap to ignore". The horizontal lines are the Fibonacci Retracement levels of the huge rally from February 2016. The 61.8% retracement at $126.80 held at the recent low.
Given these charts and analysis, my trading strategy is to buy weakness to the "reversion to the mean" at $118.60 and to my annual value level at $115.61. Reduce holdings on strength to my semiannual pivot of $212.29.
Read More »»»
• DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
Recent NVDA News
- Tesla’s April Sales Down 18% in China, Amazon’s Multi-Billion Dollar Cloud Expansion in Singapore, and More News • IH Market News • 05/07/2024 11:44:00 AM
- NVIDIA Sets Conference Call for First-Quarter Financial Results • GlobeNewswire Inc. • 05/01/2024 09:00:00 PM
- Philips Stocks Soar 47% Following US Deal, Tesla Bolsters Presence in China, and More News • IH Market News • 04/29/2024 11:11:24 AM
- BHP Bids $38.8 Billion for Anglo American; Biden Unveils Historic Micron Technology Deal, and More News • IH Market News • 04/25/2024 11:48:40 AM
- Apple Loses Market Share in China, GM Surges in Pre-Market Following Upward Revisions for 2024 Projections, and More News • IH Market News • 04/23/2024 11:25:34 AM
- U.S. Index Futures Surge While Wall Street Eyes Rebound on Earnings Focus, Oil Prices Slip • IH Market News • 04/22/2024 12:09:47 PM
- Li Auto Stock Drops 7.3% Amid Tesla Price Cuts, Salesforce Retreats from Informatica Deal, and Other Market Updates • IH Market News • 04/22/2024 12:09:21 PM
- Nasdaq, S&P 500 Extend Losing Streaks On Tech Weakness But Dow Advances • IH Market News • 04/19/2024 08:32:14 PM
- Traders May Make Another Attempt At Bargain Hunting • IH Market News • 04/18/2024 01:14:37 PM
- Apple to Invest $250 Million in Singapore Expansion, Oracle Commits $8 Billion to Japan Infrastructure, and More News • IH Market News • 04/18/2024 11:11:52 AM
- United Shares Surge 5.3% in Q1 2024 Earnings Beat; Take-Two Cuts 5% of Workforce, and More News • IH Market News • 04/17/2024 10:57:39 AM
- Delta Generates US$37 Million Profit in Q1, Google and Intel Unveil Cutting-Edge AI Chips, and More News • IH Market News • 04/10/2024 11:13:48 AM
- U.S. Stocks May Move Back To The Upside In Early Trading • IH Market News • 04/05/2024 01:10:21 PM
- Apple Terminates 614 Employees, Disney Unveils June Crackdown on Password Sharing, and More Updates • IH Market News • 04/05/2024 11:38:57 AM
- U.S. Stocks Close Sharply Lower Following Late-Day Sell-Off • IH Market News • 04/04/2024 08:34:37 PM
- Cal-Maine Surges on Strong Quarterly Performance, Taiwan Earthquake Disrupts Tech Supply Chain, and More • IH Market News • 04/03/2024 11:12:20 AM
- GameStop Shares Tumble 20% in Pre-Market Trading Amid Revenue Decline, Direct Digital Plummets 42%, and More News • IH Market News • 03/27/2024 10:54:47 AM
- Tech Sector Weakness May Weigh On Wall Street • IH Market News • 03/25/2024 01:26:54 PM
- U.S. Stocks Close Mixed On The Day But Sharply Higher For The Week • IH Market News • 03/22/2024 08:40:00 PM
- Looming Fed Announcement May Lead To Choppy Trading On Wall Street • IH Market News • 03/20/2024 01:16:55 PM
- U.S. Index Futures Trade Sideways Amid Anticipation of Fed’s Policy Update; Oil Prices Dip • IH Market News • 03/20/2024 11:17:32 AM
- JPMorgan boosts dividends, Chipotle unveils 50:1 stock split, and Latest News • IH Market News • 03/20/2024 11:15:48 AM
- U.S. Stocks Show Notable Turnaround Amid Rebound By Nvidia • IH Market News • 03/19/2024 08:35:13 PM
- Futures Pointing To Initial Pullback On Wall Street • IH Market News • 03/19/2024 01:22:58 PM
- Unilever Initiates Ice Cream Division Spin-Off and Announces Job Cuts; Berkshire Ramps Up Share Buyback Efforts, and More • IH Market News • 03/19/2024 11:33:10 AM
FEATURED Cannabix Technologies Launches New Compact Breath Logix Workplace Series and Prepares for Delivery to South Africa • May 7, 2024 8:51 AM
NanoViricides Reports that the Phase I NV-387 Clinical Trial is Completed Successfully and Data Lock is Expected Soon • NNVC • May 2, 2024 10:07 AM
ILUS Files Form 10-K and Provides Shareholder Update • ILUS • May 2, 2024 8:52 AM
Avant Technologies Names New CEO Following Acquisition of Healthcare Technology and Data Integration Firm • AVAI • May 2, 2024 8:00 AM
Bantec Engaged in a Letter of Intent to Acquire a Small New Jersey Based Manufacturing Company • BANT • May 1, 2024 10:00 AM
Cannabix Technologies to Deliver Breath Logix Alcohol Screening Device to Australia • BLO • Apr 30, 2024 8:53 AM