Seven Straight Down Days for NVIDIA. Are Investors Antsy Yet?
While I won’t take sides on NVDA before it announces earnings this week, I do have a read on the indicators and charts for you.
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The Market
There is a huge fuss being made over NVIDIA’s seven straight down days. I would love to tell you I have a strong view of that, but as is almost always the case, I have no interest in picking a side going into earnings.
What I can tell you is that seven straight down days means the stock is oversold. If it is red tomorrow, then it is simply more oversold!
I would look at the QQQ chart, and I would note that it looks quite weak, but it has a gap to fill around 700. And using the Nasdaq Momentum Indicator, I show it getting oversold the end of this week. It’s not a great oversold, but it ought to be enough to get a bounce.
Meanwhile, the S&P came down to last week’s low (7640) today. It has a gap to fill around 7600. And the Russell 2000 is in the same place it was in late June, so now the bulls are going to want it to hold that uptrend line.
The good news is the put/call ratio zipped up to .90 today, so folks got a bit antsy after last week’s call buying spree. Yet none of the indicators changed. I still think the VIX needs to have a rally.
New Ideas
I recommended Alphabet (GOOGL) last week, and while it was up today, it’s barely budged. If it gets over this 350 area, I think it has a chance to run toward that resistance near 370.
And since Verizon (VZ) is sort of the other side of the Google trade (one kicked out of the DJIA while the other goes in), it’s been a good run for VZ (+20%), but it is at resistance now. I’d get concerned if it breaks 48.50.
Today’s Indicator
The 30-day moving average of the advance/decline line is not oversold.
Q&A/Reader’s Feedback
I think ServiceNow (NOW) is making a bottom. I also think short-term, it is overbought and at resistance. I don’t know if it pulls back that much, but if it comes down into the 115-120 area, I’d get interested in it.
CNH Industrial (CNH) is over-extended short-term, but a pullback that holds that 11.25 area ought to be okay to buy.
Chipotle Mexican Grill (CMG) is also short-term over-extended, but it too looks like a bottom in the making. It could use a pullback (as I have drawn in blue), but I think it ought to get over that downtrend line in the fall.
I would point out that McDonald’s (MCD) continues to try and build a base. If it is still milling around as we head into tax loss selling season, it’s probably a good candidate for a year end rally.
It’s possible Freshpet (FRPT) is making a big giant bottom, but I suspect rallies into the low 80s get stopped the first time up. In fact, the chart would be better if it rallied up there and then came down to retest 72.
