Good Time To Buy Nvidia Now Before Its Earnings? Here's What I have Observe.
$NVIDIA(NVDA.US$ Q1 FY25 earnings report came with high market expectations. Analysts anticipate significant growth in adjusted EPS and revenues.
With the data center segment driving revenue growth, concerns arise about overexposure to the AI chip market, especially amidst increased competition. Despite potential challenges, analysts remain optimistic, with price target upgrades and expectations of continued AI demand driving investor confidence.
I believe what we as investors should be interested is whether we can start preparing a position before Nvidia scheduled to release its 1st quarter FY25 financial results after market closes on next Wednesday, (22 May 2024).
In this article, I would like to see how Nvidia have been trading till now before its much anticipated earnings.
Rising (Ascending) Wedge Observed From Nvidia Trade
I have observed a rising (ascending) wedge pattern in recent Nvidia trade, the rising (ascending) wedge pattern is a bearish chart pattern that signals an imminent breakout to the downside. A rising wedge can be both a continuation and reversal pattern, although the former is more common and more efficient as it follows the direction of an overall trend.
The main strength of an ascending wedge pattern is its ability to warn us of an imminent change in the trend direction. Despite the fact that the wedge captures the price action moving higher, the consolidation of the energy means the breakout is likely to happen soon.
So if we were to look at how Nvidia have been trading in an upside trend, I would look at it as a continuation. So question is whether is it a good time to take a position?
The next thing we need to look out is the volume, the moment the volume breaks the decreasing trend is when the candle breaks out of the wedge.
A higher volume behind the break is a great evidence that the breakout is happening. So I would be watching the volume build up today (17 May 2024), if there is a higher volume recorded, we could see a break out. But I am looking at other indicators for confirmation as well in the following sections.
Potential Buy Opportunity Now Before Earnings Next Week
As seen in the MACD and KDJ chart, I have observed that the last Buy signal was 25 April 2024, and we are not going to see any more buying opportunities.
But we are not seeing any SELL signal as well, so I personally would think that we could take a position to prepare a gap up before Nvidia announced earnings on 22 May 2024.
Selling Strength Diminishing -> Demand Coming Back
If you have been following Nvidia trade, you would notice that there have been some selling when investors either take profit or adjusting their positions.
With the earnings nearer (coming 22 May 2024) for Nvidia, we could see it changing to demand (buying) either in today (17 May 2024) trading or early next week.
I would be watching how this played out at the end of Friday (17 May) trade.
Summary
Based on what I have observed, it looks like Nvidia need to come out from the selling, and also the volume changing from descending to ascending, this would help to create a nice breakout just before its anticipated earnings on 22 May 2024 after market close.
I will be watching the price action closely from today (17 May 2024), and update next week if we have found anything interesting, stayed tuned!
Appreciate if you could share your thoughts in the comment section whether you think Nvidia is forming a breakout and it create a potential opportunity now to buy?
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Daniel Jeya Raman : Good write overall. Holding 20 call contracts with 1940.375 price that expires on 19th of July and 2 stocks. Let's see how things work out for NVDA.
MonkeyGee : even with earnings that meet or beat expectations, it still might not go up. Unless there is something very impressive. Noticed for this qtr not many stock really moved up after earnings.