Shares of Nvidia (NVDA) was raised to an 'overweight' (buy) rating by a fundamental analyst at Morgan Stanley Friday. Let's review the charts to see if the current uptrend can extend further.
In this daily bar chart of NVDA, below, I see a mostly positive picture. Prices have been in an upward trajectory from a low in October and a higher low in late December. Prices trade above the rising 50-day moving average line and above the rising 200-day moving average line. The 50-day line crossed above the 200-day line in January for a bullish golden cross buy signal. The trading volume histogram does not show me a rising trend or expansion to confirm the price gains.
The On-Balance-Volume (OBV) line has followed prices higher and suggests that buyers are being more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but it has been correcting since February.
In this weekly Japanese candlestick chart of NVDA, below, I see a mixed chart picture. Prices trade above the rising 40-week moving average line. The weekly trading volume shows a decline from August levels.
The weekly OBV line shows a rise from October. The MACD oscillator is bullish and in an uptrend above the zero line.
In this daily Point and Figure chart of NVDA, below, I can see an upside price target in the $319 area. A trade at $220 could weaken the picture.
In this second Point and Figure chart of NVDA, below, I used weekly price data. Here the software projects a price target in the $405 area.
Bottom line strategy: In my February 23 review of NVDA I wrote that "In the short-run the charts and indicators suggest that NVDA could correct further to the downside. Maybe Wednesday's earnings report is the impetus for the correction. Longer-term, NVDA shares could climb further in the latter part of 2023 and into 2024."
With hindsight, the charts of NVDA did not correct further and have taken off on the upside. For now, look for further gains.
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