Potential signal:
- If NVDA breaks above the $185 level, I’d be aiming for the $197 level.
- Stop loss at the $175 level.
During the trading session on Friday, we have seen Nvidia rally again, as it looks like we are trying to break above the shooting star that formed on Thursday. If we can break above the top of the candlestick, then it’s likely that Nvidia will go racing toward the $190 level, as it is the next large, round, psychologically significant figure. Markets pulling back from here would make a certain amount of sense, as the market has been very strong for a while, and eventually people will try to take profit. That being said, the $170 level underneath will end up being a short-term support level, and it’s also worth noting that the 50 Day EMA is racing higher, at the $160 level.
Nvidia Leads the Way
Nvidia continues to be the biggest name for artificial intelligence, and therefore I think the market continues to flood into this name as we have gotten to the point where it is just simple momentum. After all, the market has been straight up in the air since the bottom in April, and sooner or later we will get a significant pullback. That being said, if we do get a pullback, I think that will be plenty of people willing to come in and take advantage of cheap stock.
To the upside, one would have to assume that there will be a lot of headlines near the $200 level, and therefore one would also have to assume that it will almost be like a magnet for price. Once we get there, it will probably make good headlines, but ultimately, I could see Nvidia break in much higher than that over the longer term. It’s almost impossible to short this market right now, and of course a lot of money managers have to explain to their clients why they would not own Nvidia, meaning that it is a self-perpetuating monster at this point.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.