NVDA overextended on AI hype, short to 200
Diupdate
NVDA is overvalued. There really isn't a logical argument against this no matter how many times Jensen says AI on a conference call. YoY constant revenue with the enterprise world looking to continue to cut spend on infrastructure in 2023? Really though, 
SNOW is now handing out yellow snow cones for guidance; they're effectively saying "companies are spending less than we estimated", yet somehow the 100x PE NVDA is immune. I get it, NVDA and SNOW are different companies with very different financials, but my point is that the two of them do generally share the same buyers and customers within a company and it is highly unlikely that companies are going to cut spend on the data warehouse without also cutting spend on their model training. When costs are cut, everyone is impacted.
I would normally try to lay out the pros and cons as I see them but, given that most discourse on this site seems to come from irrational meme stock fanboys, I don't really see how a meaningful conversation can occur.
There are only a few, very simple and logical reasons for shorting NVDA right now that, in my opinion, make this risk/reward high enough for an entry:
1. On the weekly, NVDA is above 70. As soon as the current week's RSI closes below the prior weeks RSI value it will be an indicator to enter short (e.g. if it closes below 70.14 this week).
2. NVDA is currently in its 9th consecutive week closing above the prior week's close. This is rare and from what I counted never before has it had more than 7 consecutive weeks of inclines. The takeaway: it's due for a mean reversion. The catalyst of which may be profit taking, failure to find enough buying power to punch through $238 or more macro economic news.
3. Volume is decreasing on the daily and the weekly (although earnings did spike the volume such that last week's volume was unusually high), showing less desire for buying.
4. There was a triple top at $238 over the past few days (not depicted in the weekly chart), the @238 price has been a stong resistance and support each time NVDA has come near it
5. NVDA, like all meme stocks and pump and dump stocks, occasionally shows 3 step patterns which are reliable when swing trading: 1) big run up in price, 2) attempted rejection with failure to reverse by bears wherein they acquiesce and 3) exuberant buying by bandwagoners with fomo.
Short NVDA after weekly RSI drops below prior weeks value. Look to exit at $200.
SNOW is now handing out yellow snow cones for guidance; they're effectively saying "companies are spending less than we estimated", yet somehow the 100x PE NVDA is immune. I get it, NVDA and SNOW are different companies with very different financials, but my point is that the two of them do generally share the same buyers and customers within a company and it is highly unlikely that companies are going to cut spend on the data warehouse without also cutting spend on their model training. When costs are cut, everyone is impacted.I would normally try to lay out the pros and cons as I see them but, given that most discourse on this site seems to come from irrational meme stock fanboys, I don't really see how a meaningful conversation can occur.
There are only a few, very simple and logical reasons for shorting NVDA right now that, in my opinion, make this risk/reward high enough for an entry:
1. On the weekly, NVDA is above 70. As soon as the current week's RSI closes below the prior weeks RSI value it will be an indicator to enter short (e.g. if it closes below 70.14 this week).
2. NVDA is currently in its 9th consecutive week closing above the prior week's close. This is rare and from what I counted never before has it had more than 7 consecutive weeks of inclines. The takeaway: it's due for a mean reversion. The catalyst of which may be profit taking, failure to find enough buying power to punch through $238 or more macro economic news.
3. Volume is decreasing on the daily and the weekly (although earnings did spike the volume such that last week's volume was unusually high), showing less desire for buying.
4. There was a triple top at $238 over the past few days (not depicted in the weekly chart), the @238 price has been a stong resistance and support each time NVDA has come near it
5. NVDA, like all meme stocks and pump and dump stocks, occasionally shows 3 step patterns which are reliable when swing trading: 1) big run up in price, 2) attempted rejection with failure to reverse by bears wherein they acquiesce and 3) exuberant buying by bandwagoners with fomo.
Short NVDA after weekly RSI drops below prior weeks value. Look to exit at $200.
Catatan
JPOW came out with the expected "higher for longer", undoing all the hype from last weeks non-voting members. Big money tried to create a higher swing today to draw in more liquidity and now a good opportunity for NVDA to open a short has appeared as it is just now at support of a very steep parallel channel. If the buy algos want to stay active price must continue within this channel. But is anyone willing to pay $240 for this given that NVDA is the 6th largest market cap in the world already and doesn't even crack the top 100 in revenue? Too much risk in my opinion when even perfect execution is sufficient to sustain this price.
Pernyataan Penyangkalan
Informasi dan publikasi tidak dimaksudkan untuk menjadi, dan bukan merupakan saran keuangan, investasi, perdagangan, atau rekomendasi lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Persyaratan Penggunaan.