Nvidia Beat Is a Foregone Conclusion, but Will it Satisfy the Bulls?
The tech sector and perhaps the market as a whole is looking for good news from Nvidia this week.
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The chart below of Dell Technologies DELL is somewhat arbitrary. I’ll explain why in a moment, but it would catch my attention if I didn’t know what company it represented and simply glanced at the price action.
Over the past two weeks, Dell’s stock has consolidated in a very tight horizontal channel. This follows a similar horizontal channel in late July, followed by a sharp drop in early August. Many of you will immediately recognize the bullish inverse head-and-shoulders pattern.
Normally, I would buy a close over $115 and target $135 on the upside. That would fill the gap from July. While that is a huge move from a percentage standpoint, it still leaves Dell $40 shy of the late May highs. Even better, if the stock were to close below $108, then the bull thesis would be removed, and I would sit this one out.
We aren’t in a normal environment, though. Nvidia NVDA is driving the tech market, and Nvidia reports its earnings after the bell on Wednesday.
I don’t believe Nvidia misses its number. In fact, I think a beat is a foregone conclusion in the market, but that doesn’t necessarily mean the stock moves higher. The question becomes: Does Nvidia surpass whisper numbers, and does its guidance satisfy bulls? Honestly, I have no idea, but I am confident that however the market reacts to Nvidia, it will carry over into the rest of the AI and semiconductor names, as well as tech as a whole.
This means that Dell's and other tech names' technical setups will be driven by the market’s reaction to Nvidia rather, than their own chart.
At the time of publication, Byrne had no positions in any securities mentioned.
