Nvidia Explodes Higher

Tech giant carries the market...again!

Nvidia Explodes Higher
Photo by Jonas Frey / Unsplash

I’ve been busy with work and life lately so I haven’t had a lot of time to write and trade. Yesterday, on May 23, 2024, I went long NVDA again because it made a new all-time high the day before.

Why the sudden move higher? Earnings and revised guidance for the next quarter. That's right, NVDA earnings beat expectations all around and they (NVDA) see, growing sales ahead. If this wasn't fabulous news, they put the icing on top when they announced a 10:1 stock split!

All signs keep pointing to this stock going higher. My guess and this is only a guess, is that it will reach near $1100 before splitting and then go back to the $300 to $400 range pronto.

Of course, all this could end badly but that’s life in the fast technology lane.

NVDA Stock Explodes Higher
(c) Author

How am I trading this? Nothing special but just trend following it. You can read about the simple strategy below.

Does Trend Following Work?
As long as you’re disciplined at moving your stops, you can just “set it and forget” until the trend flips and you’re taken out.

Update

I'm updating this post with a new chart, three days later. It shows NVDA becoming a bit parabolic which is worrisome. Parabolic price moves tend to create pullback situations where the prices could collapse quickly. Granted, there is a lot of euphoria priced into NVDA right now but I suspect there could be a pull back before the stock split.

(c) Author

We might be seeing a case of "coming too pullback far, too fast." While I don't use technical indicators to trade, I do keep a lazy eye on them and the RSI(14) is entering "overbought" territory. The question remains when will there be a pull back? Will it be before the stock split or after?

Disclosure: Long