[2 Sep] NVDA Dives [Gap Down]

1 ก.ย. 2022

On the news that NVDA sales to China were restricted by the US government, investors were quick to dump the stock resulting in a gap down and sustained long bearish candle. The break below the double bottom lows (5 Jul and 14 Jul) forms a compelling short that confirms the short term uptrend is no longer sustained and the bears look ready to take over. The newest restriction imposed on NVDA could also potentially cause the company to lose 400m in potential sales to China, aggravating its growth concerns that was highlighted in the recent Q2 report. Macroeconomic headwinds will continue to hinder NVDA's growth, inducing fear amongst investors at least for the short term.

Signal: Gap down below prior horizontal support and long bearish candle
Entry: 133.2
Stop: 144 (High of Signal Candle)
TP1: 116 (Confluence of horizontal support and 300 EMA on the 3Y:Wk Chart)

7 ก.ย. 2022

บันทึก

[7 Sep] Update to NVDA Short
I didn't get stopped out of the trade, but I thought I should close the trade early for a few reasons: (1) The flush that I was anticipating did not happen despite market weakness and NVDA simply started consolidating, failing to break lower lows, (2) The indices are showing signs of bullishness, which may provide a better entry point for shorting again should NVDA rallies and hits resistance, (3) It's simply not ideal to keep a short trade for too low since it requires the borrowing of shares and the interest accumulates the longer you hold the trade. Closing the trade early might seem contrary to my belief that NVDA would likely see a correction in its valuation, but it's always important to check if your setups are working well and adapt to the current market conditions. Remember: you can have the right thesis, but with the wrong execution you will still LOSE money.