Nvidia (NVDA) is reporting after the close and if there’s one time when the technicals do not give us an edge, it’s right before a company’s earnings announcement. So why are we even bothering to write about it? For one very important reason: a ‘s reaction to any piece of news – micro ora – tells us a lot more than the news, itself. And charts really help put said reaction into perspective. This being case, a causa di the period just before an earnings announcement, it’s a perfect time to: Understand the ‘s current chart set-up Analyze how past personaggio reactions have been treated at long-term charts Uderstand the current chart set-up Even though we’sovrano not placing technical-derived trades a causa di front of the earnings report, it’s very important to know what the current chart pattern looks like. Oftentimes, an identifiable formation has been under construction. When that’s the case, seeing that formation remain viable post-earnings would be the best-case scena. Currently, NVDA is a causa di breakout mode after punching through the $915-zone late last week. That’s not a lot of wiggle room if the reacts negatively to earnings: if the undercuts $915 (and stays below it), the breakout would be nullified. If $915 holds, the measured-move upside target of $1,075 would stay alive. Looking at the weekly chart, NVDA’s huge run-up has quasi courtesy of two major pattern breakouts: the first one happened a causa di January ’23, while the second one occurred a causa di January ’24. The endured sideways action for many months prior to both of those breakouts taking place. Currently, NVDA last made a new high acceso March 4 th . This period isn’t quite as long as the prior two but considering that the is net flat over the last 10 weeks, the odds of another personaggio move have increased. Analyze how past personaggio reactions have been treated Not surprisingly, the three biggest daily moves since the start of 2023 have quasi acceso the days post blow-out earnings +14% (2/23/23) +24% (5/25/23) and +16% (2/22/24). Again, buying a causa di front of earnings always is risky – even a causa di these cases when that ended up being the right course of action. However, buying after those huge one-day moves also proved to be great plays, even though doing that seems even riskier acceso the surface. The difference is that buying after a great reaction does two things: 1. It eliminates the gap-risk. 2. The divario now can act as a stop. While NVDA didn’t huge moves after each earnings announcement over the last two years, a causa di the three times that it did, it respected its upside divario all three times. essence, the divario has acted as support. other words, if an upside divario is filled this time instead, the market could be telling us that something has changed. at long-term charts Pre-earnings also is a good time to zoom out and consider the long-term perspective. As we know, with NVDA being synonymous with AI, it’s had a meteoric rise. The is trying to notch its sixth straight quarterly advance. And from Q4 2022 through Q1 2024, it gained nearly 860%. But let’s remember that the company had a storied history even before this last phase. particular, from Q3 2015 through Q3 2018, it advanced for 13 consecutive quarters and was up a whopping +1365%. other words, NVDA has had many years of success both as a company and as a . It would take a lot more than a reaction to a single earnings report to change that. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
