Nvidia Could Soar to New Heights Based on Its Bullish Charts

The technical signs for the chipmaker point to continued big gains for its shares.

Nvidia Corp. (NVDA) is the Stock of the Day at Real Money as its shares are rising after the chipmaker was upgraded by two sell side fundamental analysts (a Rodney Dangerfield moment for technical analysts). We looked at the charts of NVDA last week and wrote at that time, "NVDA could fill some of its price gap today but I suspect that part of the gap will remain and prices will be heading still higher in the weeks ahead. The $300 and $340 areas are our two nearest price targets. Stay long." With the stock reaching $300 here on Thursday morning before the market open it can't hurt to take another look at the charts of Nvidia, which is a holding of Jim Cramer's Action Alerts PLUS charitable trust.

In this daily bar chart of NVDA, below, we can see that prices have really come on strong since early June. Prices are well above the rising 50-day moving average line as well as the rising 200-day moving average line. Trading volume has been strong and the daily On-Balance-Volume (OBV) line has moved steadily higher for months and just made a new high for the move up. A strong OBV line tells us that buyers of NVDA have been more aggressive, with heavier volume traded on days when NVDA has closed higher on the day. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration at a new high above the zero line.  

 

In this weekly bar chart of NVDA, below, we see a bullish picture. Prices have cleared the 2018 peak. NVDA is well above the rising 40-week moving average line. The weekly OBV line and the MACD oscillator are both bullish. 

 

 

In this Point and Figure chart of NVDA, below, we manipulated the price data until we were able to get a higher target above $340. Here we can see a potential $417 price target. We'll see. 

 

 

Bottom line strategy: I find it interesting that the marketplace pays more attention to a fundamental recommendation than a technical one, but that has been going on forever. Stay long; also, $340 and then the $400 area are our price targets for NVDA.

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