Is NVDA a Wild Card?

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BraVoCycles Newsletter
February 21, 2024

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Market Summary

The market “behaved” the last few days according to the 2nd half of February seasonality I shared last weekend.

Late in the day major indexes bounced strongly, and in the after-hour (AH) session futures continued to rise on the back on NVDA earnings report. We will elaborate on NVDA further below.

Major indexes may exhibit some strength for a couple of days, along with NVDA, but then all should turn down into late spring or early summer.

As AAPL has already turned down, although it may also bounce a bit, expected NVDA reversal after some additional strength, may finally affect NDX and overall market to turn decisively down.

Market data as of 4:28pm EST

NVDA Case Study

NVDA reported earnings after the close.

The CEO said that conditions are excellent for continued growth in the coming years. That may be so, however, let me present a “premium content” type of analysis as we did for AAPL a few days ago.  Maybe prospects are good revenues but may not be for the stock price.

If you recall from several days ago, I showed that NVDA was missing just waves (iv)-(v) to complete a multi-year Elliott Wave (EW) structure. We got (iv) today and in the AH session completing (v), which may extend into Thursday morning or a bit longer. But the EW structure suggests that NVDA is completing the wave (v) of ((v)) of 5, so a very significant correction is due upon the completion of this fifth wave in progress. The updated EW chart is shown below.

NVDA in the AH session produced a preliminary target to about 770. A bit higher in the next couple of 65min bars and it will be confirmed and extend to about 800.

But the composite cycle projection obtained from the daily chart indicates that NVDA may bounce a few days from todays low but then it should be down into June, and after a summer rally, down into the end of year.

Overall, I expect NVDA to turn decisively down within a few days after prolonged parabolic rise. This may help turn NDX and overall market to turn down in a more convincing way.

Sentiment

The SmartMoney/DumbMoney indicator has improved a bit but it is still in the bearish territory and has long way to go until it starts to send bullish signals (above the green dashed line).

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