NVIDIA Corp (NVDA)

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NVIDIA Corp. (NVDA) 2023 Stock Market Forecast
By: Tom Bowley | January 1, 2023

Large Caps Must Rebound

Our major indices like the S&P 500 and NASDAQ 100 are driven mostly by large cap performance. These are two market-cap-weighted indices, meaning that large cap stocks like Apple, Inc. (AAPL) and Microsoft (MSFT) will carry a heavy burden. The following six companies represent more than 20% of the S&P 500 and nearly 42% of the NASDAQ 100. If they don't rebound and begin to outperform, it'll likely be another difficult year ahead. Here's a quick glance at each of the four on long-term monthly charts:

NVDA:



NVDA has seen this type of decline before - during the Q4 2018 trade war. Many semiconductor stocks were devastated during that period, but the 50-month SMA provided support. Here we are, just a few years later, at a similar spot. The attempt to bounce at the 50-month SMA ran into some difficulty at the now-declining 20-month EMA, so we could be range-bound for awhile.

History tells us that this is the time to BUY these mega cap leaders, not sell. Do they have further downside? Quite possibly, but their long-term track records are undeniable. I remember so many folks saying "I want to see a pullback in these names" as we closed out 2022 in record high territory. But now that we've seen anywhere from a 30%-70% drop in these 6 stocks, no one wants to touch them. That's how losing money affects our psyche.

Currently, technical conditions are not looking good for the NASDAQ 100 and its component stocks, but all is not lost.

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