Nvidia Stock Must Break 149.77 to Pave Way for Further Rise
2024.11.20 16:20
NVIDIA Corp (NASDAQ:) engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the following segments: Graphics Processing Unit (GPU) and Compute & Networking. Nvidia designs and sells GPUs for gaming, cryptocurrency mining, and professional applications; the company also sells chip systems for use in vehicles, robotics, and more.
Nvidia’s Compute and Networking business segment, which includes artificial intelligence (AI), is the company’s biggest revenue generator. The Graphics business segment is Nvidia’s second largest revenue generator.
- Put/Call ratio for Nov. 22 expiry is 0.7866% more calls than puts which suggests the following three scenarios:
- With Put/Call ratio is around 0.80-0.72 for the next 2 upcoming expiries suggest that the traders are mildly bullish.
- Earning miss or lower guidance could trigger a short-lived sell-off. As the veteran tech investor won’t sell – regardless of earnings.
- Earning and guidance in line or better than estimates trigger a sharp rally.
Key Highlights:
- Analysts expect the chipmaker to deliver revenue growth driven by demand for artificial intelligence infrastructure, with record data center sales.
- All eyes will be on the updates Nvidia’s Blackwell AI chip shipments.
- Big Tech’s AI spending continues to accelerate at a pace not seen in the past many years. Microsoft Corporation (NASDAQ:), Amazon.com Inc (NASDAQ:), META (NASDAQ:) & Alphabet (NASDAQ:) have set a huge CAPEX for AI in 2025.
- NVDA is a cash-rich company with a strong balance sheet as its total debt to total capital of 0.16 is significantly lower than the industry average of 0.30.
Technical Analysis Perspective:
- NVDA has been hovering insider a symmetrical triangle from April 2024 to early October 2024.
- Typically, these types of triangles form 5 points.
- Point 1 = April 15, 2024, to June 21 (from 75.61 to 140.76)
- Point 2 = June 17, 2024, to August 09, 2024, (from 140.76 to 90.69)
- Point 3 = August 09, 2024, to August 30, 2024, (from 90.69 – 131.26)
- Point 4 = August 30, 2024, to September 06, 2024 (from 131.26 – 100.95)
- Point 5 = September 06, 2024, to October 07, 2024 (from 100.95 to 125) breakout point.
- The upside target of this triangle is 185 – 195 in the coming weeks to months.
- NVDA needs to break the recent high 149.77 high pre-earnings or during the earnings volatility to pave the way for further rise.
- A failure to break 149.77 would suggest a dip to 139 -137 support zone.
- NVDA 19 years seasonality suggests that it closes 6.9% higher in November 80% of the time.
Conclusion:
NVDA has been in an uptrend since October 2022, a breakout of a bullish symmetrical triangle is adding fuel to the current rising trend and earnings could be a catalyst force. Fundamental and technical parameters are supporting additional rallies. Let’s see how the earnings and guidance play later this evening.
