Shares of semiconductor company Nvidia Corporation (NASDAQ:NVDA) are higher by more than 190% for the year-to-date. As a result, it’s one of the better performing stocks for the year. However, while NVDA stock is way overdue for a corrective move in the next few months, in the near-term (possibly before year’s end), Nvidia might see even more upside.
We’ll look at Nvidia’s stock charts and apply some technical analysis here in a moment. But first, let’s understand what could push investors further toward this company.
You see, in any given year, most mutual funds underperform their respective benchmarks. So they don’t look foolish to their investors when they receive quarterly or annual reports, the fund managers “window dress” their portfolios by snapping up some of the best-performing stocks from the period.
Considering this year’s massive rally in NVDA stock — and that many fund managers likely missed this steamroller — it’s easy to think more fund managers will dress their portfolios up in the next two weeks with some Nvidia.
Meanwhile, on Wednesday, Evercore ISI upgraded Nvidia shares to a “Buy” rating and increased its price target to a lofty $120. Evercore believes semicondcutor stocks as a group could continue to outperform the broader market based on current earnings multiples, and that NVDA is well-positioned within this space.
This popped Nvidia stock to the tune of nearly 6% on Wednesday and pushed it to a fresh all-time high.
NVDA Stock Charts
The multiyear weekly chart of Nvidia looks like one heck of a roller-coaster ride up given the steep slope. In fact, the slope is so steep from this angle that the stock is almost arching backward (figuratively speaking).
Will investors take a breather from this stock at some point in the first quarter?
From a pure technical perspective, and from this angle, a breather sure looks overdue. So you know, Nvidia is expected to report its next batch of earnings on Feb. 15, 2017.
On the daily chart, we see that Wednesday’s rally in NVDA stock marginally pushed it to a fresh daily closing high as it broke out of a multi-week sideways consolidation range.
After the stock gapped higher on Nov. 11, it settled into a consolidation phase. All the while, it held its yellow 21-day simple moving average as support.
On Dec. 12, my proprietary B2 Reversal Indicator flashed a buy signal by marking the chart with a green up arrow. This was followed on Dec. 13 with follow-through buying and the eventual breakout yesterday, Dec. 14.
From here, as long as we don’t see any major bearish reversals NVDA stock has a next upside target around $103-$104, or about 8% to 9% higher.
Any break back below $90 should serve as a stop-loss signal for the near-term.
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