Nvidia Corp. (NVDA) is due to report its fiscal second-quarter earnings after the close on Wednesday and analysts seem to be expecting a strong print and a positive outlook. Prices have rallied in advance of those numbers but the charts and indicators have been bullish for some time now.
We last checked in on NVDA
on February 12 just before it declined about $100. Let's check out the charts and indicators again.
In this updated daily bar chart of NVDA, below, we can see that the shares barely stopped to rest as they started to climb after their mid-March low. Prices have stayed above the rising 50-day moving average line since early April. Prices are well above the rising 200-day moving average line.
Trading volume has been very active since February and the On-Balance-Volume (OBV) line has been rising the past 12 months and only dipped slightly in April and May. The 12-day price momentum indicator is a leading indicator and does not show signs of a bearish divergence ahead of earnings -- momentum has made a higher highs from June to July to August.
In the weekly bar chart of NVDA, below, we can see a pretty dramatic rally from late 2018. Prices have more than tripled in a relatively short period of time. NVDA is above the rising 40-week moving average line.
The weekly OBV line is bullish as it too has made a new high. The 12-week price momentum study is not flashing any bearish divergences at this juncture.
In this Point and Figure chart of NVDA, below, we can see a price target close to $600. Not bad.
Bottom-line strategy: 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 the stock should be able to handle anything but a huge disappointment. The $600 area is our next price objective.
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