Nvidia (NVDA) – Get report Stocks have finally been giving the bulls something to cheer for as stocks rally.
Like most big tech, Nvidia peaked in early September, reaching roughly $ 588 a share. We have had streaks above that level, but none of the rallies have been sustainable.
That’s despite the fact that semiconductor shortages keep demand high. It is also despite the fact that the crypto mining market keeps the demand for mining-specific chips high.
Even with strong earnings and an impressive GTC event (where management again updated its guidance above consensus expectations), Nvidia’s stock was unable to move.
However, for Nvidia, share Finally it erupted after the company’s most recent earnings report. Now investors are trying to figure out how far this action can go.
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Shares tumbled for a day after the company reported earnings in mid-May. Growth stocks were still in a bear market and investors weren’t sure if they should buy Nvidia despite the good results.
It took them a day to figure it out, but then they started gobbling up the stock.
However, with sustained growth acting like a tailwind and a 4-for-1 stock split as of July 20, buyers can continue to bid higher on this name. That’s what we saw near the end of summer last year with Apple and Tesla. (TSLA) – Get report.
In any respect, the rally here has been pronounced and while Nvidia shares have been resting for a few days in a row, they still haven’t tested the 10-day moving average in nearly a month.
As it stands now, stocks are reaching the 161.8% extension areas in both the largest and shortest ranges as of 2021. Also, there is a bit of divergence in the Williams% R reading.
These observations make me a bit cautious on short-term stocks, but not in a bearish way. Rather, it leaves me aware of a possible consolidation, which, to be honest, would be healthy after such a big rally.
That being said, I am optimistic about Nvidia. If this stock can sustain the 10-day moving average and hover around $ 700, it opens the door to higher prices. Specifically, he keeps $ 750 to $ 766 on the table, the latter of which comes into play around the twice range extension.
At $ 750 after the split, Nvidia would trade at $ 187.50. That could leave room for up to $ 200 in a post-split world or $ 800 in a pre-split world.
For long-term investors or traders, the 261.8% extension to close to $ 860 seems impossibly far off, but if Nvidia can continue to trend upward, it wouldn’t rule out this target going forward.
On a close below $ 690 and the 10-day moving average, we could get a retest of the $ 650 breakout level and / or the 21-day moving average.