NVIDIA Corporation (NASDAQ:NVDA) missed expectations

NVIDIA Corporation (NASDAQ:NVDA) missed expectations

Over the last week, we’ve seen surveys indicating investors turning more cautious, Wall Street have a falling out with its favorite stock (), and data showing just how harshly investors judged poor earnings over the last quarter.

The more than 18% drop in shares of Nvidia (NVDA) on Friday — which followed the company’s earnings report on Thursday that missed expectations — was but the latest evidence of a market ready to hammer yesterday’s winners for not living up to the hype. Through Friday’s close, Nvidia shares are down 38% from their all-time high.

If 2018 was a year where investors tried to sort out how much tax cuts changed the long-run trajectory of the U.S. economy and the health of corporate America, 2019 will be about investors bracing for the start of the next downturn.

The issues at hand for executives are rising interest rates and Trump’s trade war. Neither of which are going away. Several Fed speakers in the last few days of the week made clear that the Fed is not going to be moved off its current course of raising rates in December and then again at least two times in 2019 because of the recent bout of market volatility.

On trade, the headlines from the Trump administration may be contradictory at times but there still exists nothing more than a preliminary outline of what a trade deal with might look like. But it’s clear Trump will continue pressing until a new deal is made.

In its latest corporate Beige Book, an overview of what companies said about the economy on their earnings conference calls, Goldman Sachs’ equity strategy team noted that though executives acknowledged a slowing pace of global growth, they see the market as overstating the potential dangers.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 234.20.

The projected upper bound is: 190.94.

The projected lower bound is: 133.62.

The projected closing price is: 162.28.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 3 falling windows in the last 50 candles–this makes the current falling window even more bearish.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.2751. This is not an overbought or oversold reading. The last signal was a buy 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 29.11. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 13 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -277.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.

Rex Takasugi – TD Profile

NVIDIA CORP closed down -37.960 at 164.430. Volume was 324% above average (trending) and Bollinger Bands were 35% wider than normal.

Open High Low Close Volume___
163.320 170.660 161.610 164.430 49,087,976

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 200.11 240.29 244.88
Volatility: 132 88 59
Volume: 16,698,457 12,806,977 12,995,692

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

NVIDIA CORP gapped down today (bearish) on heavy volume. Possibility of a Breakaway Gap which usually signifies the beginning of a major market move. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
NVIDIA CORP is currently 32.9% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of NVDA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on NVDA.O and have had this outlook for the last 28 periods. Our momentum oscillator is currently indicating that NVDA.O is currently in an oversold condition.

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