Dominating Chart Patterns in NVDA’s 246% Gain in 2023
Ascending channels and trading ranges dominate NVDA’s price movement this year
Contents
Ascending Channels (Jan — Aug 30)
Trading Range (Aug 31 — YE)
How to Watch NVDA in 2024
Ascending Channels Dominated from January through August 31
If you were using ascending channels to help you determine when to trade this stock over this period, you would have been winning. Big.
No matter where you bought the stock over this period, you wouldn’t have had to stomach many corrections (at all) as your gains would have more than made up for them.
Candlestick Chart (January through June):
Candlestick Chart (June through September):
There were only a few small “corrections” throughout this period:
2/14–2/22: -10% (after 57% gains since 12/30/22)
5/30–6/7: -7% (after 174% gains since 12/30/22)
6/20–6/26: -7% (after 200% gains since 12/30/22)
7/18–8/11: -14% (after 225% gains since 12/30/22)
What’s interesting here is that, if you were waiting for a larger correction to buy the stock, you wouldn’t have found any throughout this huge rally!
I have always been hesitant to take a position in a stock that has already seen huge gains, however this is clear evidence that I need to rethink this strategy!
20% Trading Range Dominated from September 1 through Year End 2023
On August 24, 30, 31, and September 1, you can see the stock finally struggling to hold on to prices above $500 per share:
Since then, the stock has traded in a range between about $400 and $500 per share. (So if you were to have bought in at $500, you would have been sitting on a 20% loss when the stock tested the bottom of its range at $400.)
Resistance near $500
Resistance around the top of its trading range near $500/share was tested multiple times:
Image
On 8/31 the stock closed at $493.55/share and saw an 17% loss before it started to recover
On 11/20 the stock closed at $504.09/share and saw a 10% loss before it started to recover
On 12/18 the stock closed at $500.77/share and saw a 4% loss before it started to recover
Support near $400
Support around the bottom of its trading range near $400/share was tested multiple times as well:
On 9/21 the stock closed at $410.17/share and saw a 14% gain before it started to correct again
On 10/26 the stock closed at $403.26/share and saw a 25% gain before it started to correct again
How to Watch NVDA in 2024
Follow the performance of other semiconductor stocks as comparison
While other large cap semiconductor companies (like AVGO, AMD, INTC) have closed out the year with highs (beating their peaks from earlier this year), NVDA still appears to be struggling to cross through resistance it was seeing around $500 per share from earlier this year.
Personally, I see this as a sign that the investment community sees more value in other semiconductor stock picks right now.
Use its latest trading range as guidance on when to close out of any new positions
However, the fact that NVDA has managed to hold on to its large gains this year is a great sign to me. If I were to buy this stock, I would use its latest trading range as criteria to help me determine when to close out of my position.
