The NVDA and bitcoin charts are similar so it leads you to believe that young traders that are pro-bitcoin, have been increasing their leverage on NVDA, and visa versa, as the price of bitcoin, and NVIDIA, move higher. That bubble popped.
Humorously, idiot America is spending money hand over fist for AI chips that run hot, and expansive data centers, that do not even yet have the power available to operate, while the lifespan of the chip decreases. By the time the data centers come on line, the chips may be obsolete. All this so the stupid chatbot garbage can tell you what to buy faster. Pause for laughter.
Even funnier, one of the godfathers of AI was asked what advice he would give to a young person starting their career. He paused, and then definitively said, "Be a plumber." There are high hopes for Big Tech that is caught up in the AI circle-jerk where Peter lends money to Paul that gives the money back to Peter because he is buying a new Rubin chip to heat-up his Reuben sandwich at lunchtime. And the banksters and lawyers standing in the shadows, so you can't see their faces, say they got it covered. Yes, this is all going to end well. Pause for laughter again.
There is always some AI hype news that will bounce price for a while but then it slumps back over again. The latest is selling the H200 chips to commie China so the fans went wild on Friday, a little bit, then they lost their gumption, and fell on their swords. NVDA falls -6% last week. Two years ago, you could have bot it at 40 or 50 bucks and lots of traders with big profits are patient and holding on to their shares.
The red rising wedge is ominous; a bearish pattern. The red lines show universal negative divergence across all indicators as price moved higher locking in the top and neggie d spankdown, which occurs and is in progress. It is a multi-week top so there is lots more downside ahead. It is comical to see people step up to the plate to save the day making big block purchases of stock proclaiming the bottom is in, only to have their head handed to them on a platter. It's fun observing human nature. Each investor thinks they are Jesse Livermore; they are, but for different reasons like when he lost his shirt.
The indicators remain weak and bleak so even if a short-term relief rally appears, especially with everyone more focused on eating turkey on Thursday, NVDA will roll over and die again on the weekly basis. You have to wait for the indicators to set up with positive divergence to call the bottom but that is likely several weeks away.
Price is 179 sitting on the 20-wk MA support at 180 so it must make a bounce or die decision out of the gate Monday morning. The 165-ish is price support from August. Price violated the upper band so the middle band, that is the 20 MA at 180, was targeted, and achieved, and the lower band at 163 is also on the table going forward. This price action forms a confluence with the price support so 163-165 may act as a magnet for price. The 50-wk MA at 149 may also serve as price support as the multi-week pullback continues.
The purple arrows show a tight band squeeze so the move for NVDA right now will be a biggie. Tight bands only tell you that the magnitude of the coming price move will be large but it does not predict direction. The squeeze back in late 2023 resulted in the upside AI orgy. The squeeze early this year resulted in a downside collapse. What will this squeeze reveal? It is already moving down so the bulls must turn it around within a couple weeks, otherwise, the beatings will continue until moral improves, and price will drop a lot more.
The ADX shows that the upward rally in NVIDIA was a strong trend higher (pink box) but that ended a year ago. Since then, price stumbles sideways like a drunk in Times Square, and the recent upside is not identified as a strong trend higher (needs to move above ADX 30). It likely will not going forward either due to the pullback that has started.
The Aroon verifies the ridiculous sentiment in the stock market currently. The green line shows that nearly all the bulls remain bullish on NVDA expecting higher prices forever on the weekly basis going forward. Comically, all the bears (red line) believe NVDA will go up forever, too. Despite the pullback so far, this type of misplaced sentiment hints that there is lots more downside ahead.
This euphoric human joy must be crushed by the falling stock price on a weekly basis before a bottom can be found. Jade Bird sings, "I Get No Joy." Such a powerful voice out of that pretty petite little girl. Keystone is not long or short NVDA and has no plans to play it; maybe on the long side when the weekly chart sets up with possie d. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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