It was another sleepy trading session on Monday, with volumes remaining anemic. However, that didn’t stop Nvidia stock (NVDA) from ramping higher on the day. The stock settled higher by 5.6%, coming within $1 of its all-time high up at $614.90.
Nvidia came into Monday’s session with a little more pep in its step. Shares were up in three straight sessions, two consecutive weeks and in 8 of the last 10 trading days. With Monday’s rally, Nvidia could be looking to breakout.
Danny Riley is Mr. Top Step’s 39-year veteran of the CME trading floor and ran one of the largest S&P desks on the floor. Here’s what he’s thinking each morning before the stock market opens.
Trading Nvidia Stock
Nvidia stock has been consolidating for months now, ever since topping out in early September. In that sense, it’s not unlike Amazon or several other mega-cap tech stocks.
Nvidia tried to breakout earlier this year, but the selloff in high-growth tech stocks wiped out its momentum. On the plus side, the 50-week moving average held firm.
However, the company’s GTC keynote and increased guidance (from Monday) may give it the boost it needs to break out of its current holding pattern. It already cleared $590 resistance — a level I now want to see hold as support. From here, a close over $615 would be another catalyst for bulls to bid this name higher.
On the upside, I think $660 is possible, which is the 161.8% extension from the September correction. If we extended from the February correction instead, the 161.8% extension doesn’t come into play until $708.
In any instance, Nvidia could very well be shifting back to a trend stock, where we buy the dips and look for a run toward some of these extensions. A close below $590 is a problem for the bulls.
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