Buy the dip on Nvidia? Watch this level…
Pressure is continuing to mount on Nvidia, after shares in the semiconductor darling fell 1.66% in Wednesday trading to extend a record-breaking 9% plunge on Tuesday.
Here’s what our chief market strategist Isaac Lim has to say:
“It’s not so much about buying the dip, but about being a bit more cautious and a bit nimbler at this point in time. If you look at the price of Nvidia right after the sell-off on Tuesday, it is coming quite close to $98.70 now. I’m not asking people to buy, but I think traders should watch this level very closely, because if there is any bounce in Nvidia’s share price, it has to happen above this $98.70 level. Otherwise, if we break below the $98.70 level, we may see further weakness and drop to $75.60.”
What ails Nvidia?
Beyond the charts, Isaac believes Nvidia’s negative price momentum is a combination of several factors, including the current state of play in the broad market.
“If you look at the market structure, it is very clear that the Dow theory is in play, where you are seeing a bit of distribution – a series of lower highs and lower lows. So that in itself is really pointing to a relatively bearish setup.”
Against this backdrop, market exuberance around Nvidia have also tapered off, exacerbated by a sense that Nvidia has become a victim of its own success.
Nvidia has also become a victim of its own success. While its latest quarterly report met or beat analysts’ estimates on most measures, it was nowhere near the blowout numbers that investors have become accustomed to. More importantly, the company’s third-quarter revenue forecast also failed to impress investors, who again, have grown used to astronomical quarter-on-quarter growth.
Things could get even more interesting for Nvidia in the days and weeks ahead, so watch this space for more updates. If your emotions are causing you to be anxious, you're over exposed. Lighten up so that would allow you to be more at ease and make clearer and wiser trading decisions.
Let me know what you think in the comments section below!
Stay safe and trade safe!
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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105016063 : With its latest announcement of share buy back . How does that will correlate and affect this ? Understand the set up is relatively bearish , could that share buy back turn the tide ?
Invest With Cici : Terrific article!
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Invest With Cici 105016063 : Buybacks are only a small part of what affects a stock's movement; broader market and sector sentiment, changes in a company's earning power and efficiency, etc. have a much greater impact on the movement, as mentioned in the part “what ails nvidia”
105016063 Invest With Cici : Great , just sent in the request to join the group
105364426 105016063 : If you are a company, would you buy back shares at a high or low price?
BullBearHenry : Buybacks is one of the way to return money to shareholders and getting around the taxes in US. Also it gives the impression that price is about right value for the company to buy back their stock at fair or better value. Buybacks also reduce the share base and improve the EPS and PE of the stock too. Definitely supportive of the stock price.
joyful101 : Sept is traditionally a sell down esp for stock that has a good run. Good to buy during dip and be nimble
102982325 : The company going to buy back shares soon
葡萄山 : The financial group may have made enough money, but it will still leave some bones for retail investors to make soup.
104065085 : wait until drop further to us90 and see
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