Oh Man Was I Wrong About Nvidia

Sidenote: I was wrong about Nvidia (NVDA), but my latest video on Super Micro Computer (SMCI) was well-timed for those of you looking buy the dip and know why the dip happened in the first place.

Check it out here because we’re going to see more action like this in SMCI, and you’ll want to know how to trade it.

But Back to the Point… I Was Wrong!

I was once told just after an appearance on Fox Business News that it was refreshing to hear someone say they were wrong on the set. What the hell… People think that I’m right 100% of the time?

You realize I wouldn’t be having these conversations with you if that were the case, right?  I’d be sitting on an island talking to a tennis ball named “Penn” (That was a play on Castaway if you didn’t catch it).

OK, Nvidia proved me wrong. They crushed earnings, which means that the “priced for perfection” situation that I pointed out was trumped by a strong fundamental report card.

Do NVDA shares go straight up from here? NO!

Here’s how it plays out from here.

Yesterday’s trading volume hit what I refer to as a “crescendo moment.”  Simply put, this happens when on the same day…

  • A stock has gone parabolic.
  • The same stock breaks its top or bottom Bollinger Band.
  • The same stock hits an oversold reading according to its relative strength index (RSI).
  • That stock’s volume registers as unusually large.

All of this culminates in a moment for a stock that looks a lot like a track runner stretching themselves forward to break the finish tape at the end of a race.

You’ve probably seen that, and you’ve probably seen many of those moments where the track star tumbles to the ground because of that last second stretch to accelerate.

All of that happened yesterday on NVDA shares. It doesn’t mean that the stock is going to fall on its face – believe me, there are too many investors looking to buy this stock on a dip for that to happen – but it does mean that NVDA needs a rest before it can start running its next race.

Bottom Line

If you don’t own NVDA or are trying to add shares to an existing position like me, do yourself a favor and wait. The last three earnings reports have initially driven the stock’s prices higher only to see a short-term reversal that was the opportunity to do just that, buy the shares on a dip

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