When I thought of buying the NVDA stock, I sort of expected a strong uptrend, but a 20% increase of the stock price in 2 weeks was certainly welcome. Buying the stock at $10 mark was based on technical analysis’ indicators alone, that were applied in stock charts of different timeframes. The stock had been in a decline since January and I was lucky enough to catch the reversal right in the end of August and begin trading. The NVDA stock price closed at $12.26 on Friday evening.
When I first saw the stock chart of Nvidia, I immediately pinpointed the Fail Bottom in late August, which was a huge indicator considering the 6-month downtrend! It was the first Fail Bottom since the beginning of January, which made it extremely significant. Apart from that reversal signal, a MACD divergence in the daily stock chart added a lot more points and helped in making the decision to go long on the NVDA stock. The worst that could happen after all was the stock price to fall back to $8.65, which was the lowest low during the last 12 months. My stop loss would be at that mark, although having a stop loss right below the Fail Bottom wouldn’t be a bad idea either.
Since then, the NCDA stock price has been hitting new highs every three or so days without even challenging the latest support levels. By examining the 30min stock chart, it is apparent that the stock has entered a very strong uptrend and it is very easy to set a trailing stop, in order to take the most out of this price movement. I just have to keep a close look into the 30min or 5min charts and trade out when a support level is broken. The last support level is at $12, which is even more obvious in the 5min chart. Identifying it as the support level is rather easy, since it has been the resistance level during last week.
Now the resistance level of the stock price is fairly obvious. If the stock price reaches for even more highs above $12.30, I will have my stop loss moved right there in order to keep up with the uptrend I successfully predicted 2 weeks ago. I have already secured that this trade will be a profitable one and the question is just how much profit I can make out of it. Risk free trading is my favorite kind of trading!
If you are looking for trading NVDA stock at this point, I would suggest waiting for a breakout or buying the stock close to a support level. And of course getting out quickly, as it should retrace back to the daily moving average at some point!
