NVIDIA to $180
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Overview
It's a good mindset to be skeptical about a bull market that doesn't seem like it should exist. The GDP (Gross Domestic Product) has declined for a second consecutive quarter to a 24 month low and the Civilian Unemployment Rate is the highest it's been since Nov 2021. This leads me to believe that the current rally is being mostly fueled by two factors surrounding artificial intelligence: hype and revenue.
NVDA is the leading A.I. developer and hasn't experienced a decrease in quarterly revenue since November 2022.
When faced with the unknown -- which in this case would be the direction of the stock market -- people cling to what they know. I believe this will present itself in more clearly defined trading patterns and price-swing predictability.
Technicals
NVDA is setting up a pattern that resembles the 5 Elliott Impulse Waves with each wave taking between 3-4 months to develop. If accurate, the trough of the 4th wave could find the share price in the proximity of $100-115.
I utilized Fibonacci levels against the low of the 2nd wave to the high of the 3rd wave. In addition to helping find a support level for the 4th wave, the uptrend Fibonacci tool also provided a projected price target near $180. I compared the 1.618 (161.8%) micro-Fibonacci retracement to the 1.618 macro-Fibonacci retracement, which consumes the entirety of the already existing patterns.
I took the difference of $18.19 between the projected 1.618 Fib levels then created a low and high range where I believe the 5th wave will peak. I ended my projection at this point, however, it is worth noting that impulse waves are followed by correction waves which serve in the opposite trending direction.
It's a good mindset to be skeptical about a bull market that doesn't seem like it should exist. The GDP (Gross Domestic Product) has declined for a second consecutive quarter to a 24 month low and the Civilian Unemployment Rate is the highest it's been since Nov 2021. This leads me to believe that the current rally is being mostly fueled by two factors surrounding artificial intelligence: hype and revenue.
NVDA is the leading A.I. developer and hasn't experienced a decrease in quarterly revenue since November 2022. When faced with the unknown -- which in this case would be the direction of the stock market -- people cling to what they know. I believe this will present itself in more clearly defined trading patterns and price-swing predictability.
Technicals
NVDA is setting up a pattern that resembles the 5 Elliott Impulse Waves with each wave taking between 3-4 months to develop. If accurate, the trough of the 4th wave could find the share price in the proximity of $100-115.
I utilized Fibonacci levels against the low of the 2nd wave to the high of the 3rd wave. In addition to helping find a support level for the 4th wave, the uptrend Fibonacci tool also provided a projected price target near $180. I compared the 1.618 (161.8%) micro-Fibonacci retracement to the 1.618 macro-Fibonacci retracement, which consumes the entirety of the already existing patterns.
I took the difference of $18.19 between the projected 1.618 Fib levels then created a low and high range where I believe the 5th wave will peak. I ended my projection at this point, however, it is worth noting that impulse waves are followed by correction waves which serve in the opposite trending direction.
Kommentar
I think tomorrow will determine the short-term direction of if there will be a recovery back to $140 or a rejection back to $110. Possible tri-star pattern in formation on 1D chart.
A recovery to $140 could result in a premature breakout to the $180 price target, but technicals would need to support this possibility. $140 will be a significant ceiling and the current technicals do not display breakout worthiness.
Trade ist aktiv
Bullish divergence on MACD paired with oversold RSI and near-oversold MFI gives me confidence to go long. I believe the correction is fueled by macro-economic speculation with earnings release and the FOMC meeting looming so close. NVDA appears geared for a significant rebound. I am maintaining a price target of $180.
Trade ist aktiv
Wave 4 has entered the price range of Wave 1 so the impulse wave projection is no longer valid. After reviewing the technicals, I believe NVDA is still on the road to $180 and that the pattern is now Three Hills & a Mountain. Around the $180 price target, a significant selloff would be expected that retraces the share price back to around $115. Around this price level, going long once more may expose the opportunity of large profits as the next price target would be equal to the current share price plus the magnitude of the three hills... for a whopping share value of $250.
However, a further reduction in share price to the $70-80 range may indicate the formation of a head and shoulders pattern. I will touch base on this if/when it occurs.
Trade ist aktiv
Trading pattern: NVDA chart reveals the development of the right shoulder of inverse head & shoulders
MACD: bullish divergence annotated by yellow lines
Conclusion: NVDA is setting up for a third hill development. MACD line should progress upwards along with share price until the MACD levels off with its prior high (red dashed line) while the share price continues to climb. Maintaining price target of $180 with expected downturn shortly after.
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