A good 2019 has been made even more jolly over the past month since earnings for Nvidia (NASDAQ:NVDA) stock holders. But is now a good time to buy Nvidia stock? Let’s take a look at what’s going on off and on the price chart, then offer a couple of stronger, risk-adjusted ways to play shares in today’s market.
There’s no denying 2019 has been a solid one for NVDA. Shares are up nearly 70% on the year. And roughly 8% of those gains have been on the back of Nvidia’s earnings beat just last month. Moreover, growth is set to reassert itself while prior business-related fears and worries tied to competitors Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) continue to unwind.
Now and with a “very large phase one” trade deal ending tariff hikes which had been scheduled to begin on Dec. 15, conditions for Nvidia stock look even stronger. Additionally, with bullish investors continuing to win the trade war on the price chart, it’s time to consider a couple smarter ways to buy NVDA stock with increased odds of success.
NVDA Stock Weekly Chart
Source: Charts by TradingView
After forming a deep corrective higher-low pattern this past June, NVDA stock has rallied strongly for a fourth straight month. The price action has taken shares into a test of the 62% Fibonacci level. Thus far, the challenge of resistance has held Nvidia stock back, but the prospects for continued momentum look favorable.
Technically, shares have twice managed to hold key support from $193.50-$200 since last month’s earnings release. This area was discussed immediately in front of the report on InvestorPlace and it’s bullish. The second confirmation occurred with the development of a hammer candlestick two weeks ago. Now, and following last week’s bullish confirmation of the reversal pattern, NVDA stock is set up to move higher.
Where to Buy Nvidia Stock
For taking profits on a long Nvidia stock position, $260-$300 continues to hold our interest. This area holds NVDA stock’s initial failure into its larger correction and the shares’ all-time high. But buying shares today does pose its own set of potential challenges. Front and center, stochastics have been trading in overbought territory for a couple months and Fibonacci resistance is still intact.
Bearing this in mind, I’d wait for one of two different entries to emerge before buying NVDA. The first strategy is aligned with unobstructed momentum to play out. For this entry, stochastics needs to form a bullish crossover signal. I’d also recommend waiting for shares to clear resistance and rally above $230 before positioning.
The second approach will also require stochastics to crossover. Here though, the strategy is to buy Nvidia stock on constructive weakness toward or slightly beneath the high of the hammer signal candlestick. With either method, I’d strongly advise an exit strategy tied to NVDA holding the 50% level. In conjunction with a small allowance for necessary wiggle room, closing any positions below $207 looks like smart business off and on the price chart.
Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.