Nvidia daily
The doubling of Nvidia shares so far this year was one for the all-time market annals and it’s top today was close to Apple as the world’s second-most valuable company.
However it’s all come down as a wave of profit taking sends shares down more than 6%. That sentiment has spread to other high flyers as well with Costco down 7.5% and Broadcom off by 6.75% and Supermicro down 4.5%.
This is clearly a round of profit taking, which isn’t usually how a bull market ends, but it could cool some of the excess.
For instance, the 14-week RSI on Supermicro is at 93.9, which Barchart says is the second-highest in their database, ever. Presumably only behind GameStop.
Supermicro weekly RSI
This move looks like de-grossing and it makes some sense. The thing is, this can go on for awhile. The old saying is ‘up the escalator, down the elevator’ in a bull market — corrections can be brutal.