To The Moon

Since the first trading session in 2024, we have seen technology stocks experienced pullback, and I believe we should be able to trade these stocks using a pullback strategy at this period of correction.

In this article, I would like to share on how I will be analysing these 3 tech stocks and see if we can trade them,

$NVIDIA Corp(NVDA)$ $Microsoft(MSFT)$ $Tesla Motors(TSLA)$

What is a Pullback Trading Strategy?

It is referred to as a trading strategy that involves buying a stock after it has experienced a recent decline in price. The rationale behind this strategy is that the stock is likely to rebound from its recent decline and return to its previous price level or even higher.

Pullback Trading Strategy

We can actually find or use this strategy is by using these technical indicators. There are a combination use of these 3 indicators on when to plan for an entry and when to plan for an exit.

• 20-day moving average

• 200-day moving average

• Relative Strength Index (RSI)

When Do We Enter and Exit The Trade?

These 3 conditions need to be met before we enter at the last close price, and we would exit at the last close price when the 5-day RSI goes above 65.

Now let us take a look at Nvidia, Tesla and Microsoft and see which stock we could possible look for a trade today for potential pullbacks.

Nvidia Corp (NVDA)

As seen in the chart below, we can see that NVDA last close is slightly below the 20-day MA and it is above the 200-day MA, this makes NVDA a potential candidate for trade of the pullback strategy.

But before that we will need to look at how the 5-day RSI look like.

NVDA 5-day RSI came in at 26.78, which is below the 45 level, with all these condition met, we could plan to enter at the last close price.

But I do want to exercise some caution as the last close is just below the 20-day moving average.

Tesla (TSLA)

As seen in the chart below, we can see that TSLA last close is below the 20-day MA and it is above the 200-day MA, this would satisfy 2 condition before we decide to enter the trade.

We shall look at the 5-day RSI value.

The 5-day RSI value for TSLA came in at 25.78 which is below 45, and with all these 3 conditions met, we could plan for a trade for Tesla at its last close price.

Microsoft (MSFT)

As seen in the chart, MSFT last close is barely below the 20-day moving average though it is above the 200-day moving average.

I would not consider MSFT as a candidate for this strategy, but we can take a look at how the 5-day RSI value fare.

MSFT 5-day RSI value came in at 34.16, though it is below 45, but it is not a very good potential candidate for this pullback strategy trading.

Summary

Based on what I have shared, I would think $Tesla Motors(TSLA)$ make a better candidate to plan for a trade today by using this pullback strategy.

I will be looking to buy TSLA at around $238 when market open later on 04 Jan 2024.

Appreciate if you could share your thoughts in the comment section whether you think TSLA would have a potential uptrend today after its pullbacks over the last 2 days?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.