Welcome to Extreme Investor Network, where we provide unique insights and valuable information to help you make the most of your investments. Today, we are diving into the market leader Nvidia (NVDA) and analyzing its current trends to determine the best course of action moving forward.
Nvidia has experienced a stall in its steep uptrend, entering a consolidation phase since the second week of March. However, recent chart analysis provides some key indicators for investors to consider. Last week, NVDA successfully tested support levels defined by its March gap, the 50-day moving average, and the daily cloud model. Additionally, the daily stochastics have turned higher from oversold levels, signaling a potential oversold bounce in the near term.
On the other hand, the weekly stochastics are showing a downturn from overbought territory, increasing the risk of a deeper pullback. This poses a potential challenge for investors, especially with the seasonal adage of ‘sell in May, and go away’ on the horizon. While NVDA may still hold potential for short-term gains, investors should be cautious and consider reducing exposure after a significant bounce.
Currently trading around $868, Nvidia has key resistance levels to watch, with $974 and the psychologically significant $1,000 level in focus. A short-term bounce in NVDA could have a positive impact on the benchmark S & P 500 Index, given its substantial weighting.
Market sentiment plays a crucial role in the performance of stocks like NVDA, as seen in the correlation between NVDA’s pullback and sentiment gauges like CNN Money’s Fear & Greed Index. While a short-term bounce may boost sentiment temporarily, the 10-day moving average of the Fear & Greed Index suggests a potential further deterioration in sentiment this summer.
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