Dell Technologies
Shares of Dell Technologies (DELL) were among the more heavily traded issues on Wall Street today as the company’s stock continues to see selling pressure after last week’s earnings. Dell’s earnings, reported after Thursday’s close, failed to maintain a string of widening earnings per share beats as the company appears to be investing in their operations to meet growing demand in the AI server space.
Today, HP Inc. (HPQ) reported that they expect worldwide PC demand to remain flat through 2024.
The news affected Dell shares as well, after the company pointed to strong PC demand during a refresh cycle as part of their management comments in Thursday’s earnings report.
Dell raised their revenue guidance for next quarter and confirmed their fiscal year guidance, indicating that the company expects a strong second half of 2024.
The stock is still testing critical support at $130.
This price represents the top of the stock’s trading range in April as well as the price where its bullish 50-day moving average is posted to provide technical support.
A break below $130 will target another round of support at $120 for Dell shares, while a bullish move above $140 will set a trajectory back to $150 with the help of a bullish tailwind from the market.
Nvidia
Nvidia (NVDA) grabbed the headline attention away from Advanced Micro Devices (AMD) this morning, forcing another wave of money into the AI chip company as the stock found support at $1,100.
Early morning headlines had the stock trading 3% higher in pre-market action, where it remained, despite a pullback in the broader technology indices such as the Nasdaq Composite and the Nasdaq 100 ETF (QQQ).
Shares traded on their lightest volume in the last week, suggesting that short-term traders have pumped Nvidia as high as they will go for now. Adding to that, Nvidia’s short- and intermediate-term RSI indicators are signaling that the stock is overbought.
This indicates that Nvidia is trading in rarified air, and any hint of weakness will trigger a fast and aggressive short-term pullback in the stock, which would be healthy.
Traders will focus on the $1,100 price for the next few days, as a break below that round number will act as a trigger for the stock to move lower. Any pullbacks should be seen as just that – unless material negatives surface – as Nvidia is still among the most-chased names in the market.
This means we would see a crowd of investors buying the stock on any “buy the dip” opportunities. According to the chart, $1,000 would be an active buying level for those looking to add Nvidia to their portfolio.
Autodesk
Autodesk (ADSK) completed its ongoing audit investigation, which resulted in no restatement or adjustment of any of the company’s previous financial statements.
This headline provided relief among investors today, moving the stock 4.6% higher for the day.
The architecture and construction software developer announced in early April that it would perform an internal investigation surrounding free cash flow and operating margin procedures. The news sent shares 10% lower, completing a 30% decline from the stock’s highs of $270 just after last quarter’s earnings call on March 1.
In addition to clearing the audit, Autodesk’s management increased its FY25 EPS forecast and reiterated its FY25 revenue and billings targets.
While seemingly clearing the reporting hurdle, Autodesk’s stock is now facing a technical trend that has turned bearish. Shares are trading below both their 50- and 200-day moving averages. The stock had been above both before the reporting ordeal began.
Additionally, those two trendlines just completed a “Death Cross” pattern on Friday.
A Death Cross is a technical pattern that forecasts negative momentum for a stock.
The results of that momentum normally result in a stock price that is lower 3-6 months from its occurrence. Obviously, the fundamental news may be enough to reverse this momentum, but investors should watch closely for overhead resistance at $230.
This is where the current 50- and 200-day moving averages sit in their bearish pattern. A break back above that price will increase the number of algorithms and technical traders looking to add the stock to their long-term portfolios, driving the price higher towards the $250 price target. A break back below $200 will cause additional long-term selling pressure on the stock.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.