Nvidia: Diamond Reversal Top Pattern Points to Deeper Pullback
2024.08.29 04:03
Stocks finished mostly lower as Nvidia (NASDAQ:) reported results. The fell by 0.6%, while the declined by approximately 1.2%.
The market’s movements were primarily driven by nervous anticipation surrounding Nvidia’s results, as evidenced by the 1-Day climbing above 21.
It appears that Nvidia’s earnings have taken on the significance of a Fed meeting, jobs report, or CPI release.
Nvidia Tops Expectations, Stock Drops
Speaking of Nvidia, the company reported—no surprise—$30 billion in revenue and guided the street to $32.5 billion for the next quarter. It seems they’re living on the edge with that extra $0.5 billion in the guidance.
That makes five quarters in a row where they’ve beaten guidance by $2 billion and raised the next quarter’s guidance by $4 billion. I can’t say I’ve seen that before.
So, I guess for next quarter, we should expect $34.5 billion in revenue and guidance of $36.5 billion—give or take 2%, of course.
(BLOOMBERG)
That has the stock trading down about 6% as of right now. Technically, there is some support around the $118 level. However, it also appears that the stock has completed a diamond reversal top, which could suggest a further decline beyond the $118 level, potentially back to the gap around $109.
The same pattern is evident in the contracts, presenting an opportunity to unwind much of the gains from the past few weeks.
The one factor that could potentially disrupt this is a reset in implied volatility (IV) today at the opening, as the VIX 1-Day returns to earth.
Finally, the continued to steepen yesterday and is now at -0.03%, with much further to climb.
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