Eye This Week On NVDA & Jackson Hole
By
Mike Paulenoff
Good Monday Morning, MPTraders! August 21, 2023-- Pre-Market Update: This week the main focus of traders and investors will be on NVDA Earnings Wednesday after the close, and then Fed Chair Jay Powell's Jackson Hole speech at 10 AM ET on Friday...
On the subject of NVDA, the stock rocketed from 305.24 just prior to its fateful (and super bullish) conference call on 5/24/23 to a subsequent high at 480.40 on 7/14/23 (+57% in about 6 weeks) and then embarked on a one-month correction of 16% into last Monday's (8/14) low at 403.11.
The "bounce" off of 403.11 has hit a pre-market high of 444.40 this AM (see my attached 4-Hour Chart) owing mainly to renewed bullish research notes from HSBC, KeyBanc, and Wedbush Securities, all of which project much higher target prices for NVDA projected as high as 800 in the upcoming months (See Seeking Alpha Update below my charts). Let's be aware that these analysts are raising their targets right BEFORE Wednesday's earnings report, which testifies to their conviction about NVDA.
From a pattern perspective, and as we discussed on Friday, the jury is out as to whether NVDA's bounce off of its corrective low at 403.11 is the start of a new upleg or an "intervening" rally that separates two distinct corrective legs that in other words, argues for a likely sell-the-news reaction from investors in the immediate aftermath of Wednesday's earnings, and also throws some cold water on Wall Street's love affair with the company.
Who wants to stand in front of the Wall Street love affair with AI in general and with NVDA in particular?
Bottom Line: Technically, as long as the 8/14 pullback low at 403.11 remains intact, we should give the benefit of the doubt to upside continuation toward a retest of the July high at 480.40, and possibly a run at 500 thereafter into and/or in reaction the Wednesday's earnings report.
This also means we should expect a name like AMD to perform well merely because it is benefitting from the draft created by the lead engine, NVDA... Last in NVDA 444.90 (+2.7%)... Last in AMD 106.80 (+1.6%)...
