nvidia (NVDA) – Get a free reportShares continue to rally, up almost 10% this week and are currently rising for four consecutive days.
The technology bulls have galvanized: Nvidia has become the de facto leader in this year’s market rebound. meta (meta) – Get a free reportIt was also impressive, but no big tech stock like Nvidia is running in 2023.
Nvidia stock has more than doubled (up 113%) this year. At some point, Tesla (TSLA) – Get a free report It was in the mix, too, but the electric vehicle producer’s stock has suffered a bit in the past few months. It’s still up over 40% for 2023, but the clear leader is Nvidia.
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The graphics-chip stalwart’s stock seems to have gotten a super boost because it is exposed to the trend of artificial intelligence.
Now that Nvidia has a market capitalization of around $770 billion, the talk will likely turn to whether it can return to its all-time highs. Ultimately, investors may be speculating whether to join the trillion-dollar capital market club. To get there requires an uptick of 30% from current levels.
While that sounds like a big move, it’s not quite that simple considering how the stock has performed so far this year.
Earlier this month, we looked at Nvidia being hacked by more than $280. Now that it is above $310, let’s take an updated look at the charts.
Trade Nvidia shares
Graph courtesy of TrendSpider.com
The way semiconductor stocks have been trading lately, it’s no wonder Broadcom (AVGO) – Get a free reportmay have erupted as well. And with the way Nvidia is trading, I’m not sure what’s going to slow it down.
When we look at the charts, the initial break above $280 fluctuated, but the stock was able to reclaim that level and hold it as support. Nvidia stock then jumped through the short-term resistance at the low-$290 level before bursting through the 78.6% retracement and the $300 level yesterday.
From here, there isn’t much that stands in the way of another race for Nvidia, at least not from a technical perspective.
One can notice the 261.8% extension level of the first breakout attempt above $280. This level is running near $320. Above that level, $330 could be squeezed in before an eventual attempt to test the all-time high near $346.50.
That’s going to be about a 10% gain from here. The bulls will need to see a move above $400 for claims to raise the $1 trillion market cap.
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Nvidia is a good lesson for traders.
First, patience is required. It was a brutal move but it took some time. Secondly, for all of the macro scares and scare headlines, the traders who focused solely on their analytics would have been long nvidia rather than short.
I don’t know when Nvidia stock will reach new highs, but if the momentum continues the way it did, it won’t be long. However, “risk management” is a big component of successful trading, so traders should take profits and raise stops along the way.
On the upside, see how it handles $320, then $330. On the downside, watch for the low area between $290 and $300.
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