Semiconductor maker Nvidia (NVDA) just reported another quarter of blowout earnings, and Jim Cramer told viewers of Mad Money Thursday night that investors should use any weakness in the stock to buy.
Cramer's long been a fan of Nvidia, an Action Alerts PLUS holding. He even went as far as to name his dog after the company. Now, with shares up 106% for the year, Cramer said Nvidia is still a buy.
We looked at the charts of NVDA on Tuesday before the earnings announcement and wrote that "NVDA has been a great stock for the past four to five years. Great returns for patient holders. Traders should consider raising stops to a close below $440 ahead of earnings Wednesday. I have no special knowledge of what Nvidia will report but the stock should be able to handle anything but a huge disappointment. The $600 area is our next price objective."
With the numbers behind us let's check and see if we can refine our strategy.
In this updated daily Japanese candlestick chart of NVDA, below, we can see that prices are in an uptrend with a rising On-Balance-Volume (OBV) line - a good combination. The $460-$440 area was where prices stalled a while in their rise. This area provided some resistance and now that prices are above this area the zone should act as support on a pullback should it develop.
In this Point and Figure chart of NVDA, below, we used daily price data and added in the volume by price information on the left scale. There is some volume activity in the $464-$446 area or where the chart support is anticipated. Note the $598 price objective.
Bottom line strategy: Traders looking to raise their sell stops could bump them up to a close below $450 (the mid-point of anticipated support) from a close below $440. The $600 area remains our price objective.