Nvidia Corp. (NVDA) is the Stock of the Day here at Real Money and it is scheduled to announce Q4 earnings results after the market close today. Let's see how the charts and indicators are positioned ahead of this fundamental release.
In this daily bar chart of NVDA, below, we can see that the price fell hard and fast from early October to late December - volume increased and downside gaps can be seen - signs of intense selling.
The 50-day and the 200-day moving averages turned down in October and a bearish death cross of these two average can been seen in November. From the middle of November prices have been stabilizing. NVDA is now above the flat 50-day line.
The daily On-Balance-Volume (OBV) line has turned from down to up signaling more aggressive buying. The trend-following Moving Average Convergence Divergence (MACD) oscillator turned up in early December for a cover shorts buy signal.
The MACD oscillator is sitting on the zero line and it looks ready to turn higher for an outright go long signal.
In this weekly bar chart of NVDA, below, we can see a longer-term view of the price action. Prices are way below the declining 40-week moving average line and we can see that several levels of support have been broken. Volume declined from early 2018 to around August/September - declining volume in a rally is a sign of a weak market.
The weekly OBV line actually moved higher to September before weakening into December. The weekly OBV line has been showing improvement the past two months or so.
The weekly MACD oscillator has crossed to the upside for a cover shorts buy signal on this longer time frame.
In this Point and Figure chart of NVDA, below, we can see a bottom or base pattern. An upside price target of $201 can be seen and a trade at $161.81 will be a double top breakout.
Bottom line strategy: The rally in NVDA from its base pattern back in 2015 enriched foresighted investors. Its rapid decline in late 2018 may have caught some investors off guard - especially those who may have come late to the party. I suspect there are at least a few investors who may be looking to sell a rally in NVDA if it can get back to the $195-$225 area. NVDA may trade sideways a bit longer but we should see a rally attempt in the weeks ahead. New longs should only buy strength above $162 risking below $148. The $195-$201 area is my target.