Nvidia Corp. (NVDA) is the Stock of the Day here on Friday after the company reported its third-quarter numbers and fourth-quarter guidance on Thursday. The chipmaker forecast lighter-than-expected near-term revenues that offset a solid third-quarter earnings report. We looked at the charts of NVDA earlier this week and wrote at tht time, "Traders could go long NVDA in the $210-$200 area risking a close below $185. The $232 area is our first upside price target."
Let's check out the charts again to see if things are still on track for Nvidia, which is a holding of Jim Cramer's Action Alerts PLUS charitable trust.
In this updated daily bar chart of NVDA, below, we can see that prices have traded sideways in the $210 area for much of the month so far. Traders could have used this small consolidation pattern to acquire a long position. Even though prices moved sideways we can see that the On-Balance-Volume (OBV) line continued to rise to a new high, telling us that buyers of NVDA were more aggressive ahead of this earnings report. Price momentum slowed slightly from October to November, but this is not a big enough bearish divergence to worry about.
In this weekly bar chart of NVDA, below, we can see a bullish setup. Prices are above the rising 40-week moving average line. The weekly OBV line is pointed up, as is the MACD oscillator.
In this weekly close only Point and Figure chart of NVDA, below, we have an initial upside price target of $230. The $240-$270 area would be the next upside price target.
Bottom line strategy: Traders could hold longs recommended earlier this week. Raise sell stop protection to $190.
