To The Moon

A healthy correction!

A recent pattern of consistent sales by Nvidia executives and directors has garnered attention by investors. Particularly, CEO Jensen Huang sold 720,000 Nvidia shares between June 13 and June 21, amounting to a total of $94.6 million, achieving an average price of $131.44 per share. 

Furthermore, "Triple Witching Day" also plays a play in ntensifying the market fluctuations. We witnessed a substantial volume of option expirations due to the "Triple Witching Day," leading to an increase in market trading activity. The concurrent expiration of these options, alongside the customary index rebalancing and adjustments in ETFs, has been a contributing factor to the amplified volatility in the market. Nvidia's stock experienced an intraday drop of around 5% on that day. Statistics revealed that out of the $5.5 trillion worth of various securities derivatives expiring on Friday, those related to Nvidia were the second most valuable, trailing only the S&P 500 index.

Another potential reason is partial profit-taking by retail investors. Nvidia has experienced a meteoric rise this year, propelled by the relentless demand for its chips, which are a mainstay in the artificial intelligence computing sector. Despite the recent declines, Nvidia's YTD increase remains a staggering 138.6%. From the interim low on April 19 to the post-stock split acceleration, culminating in Tuesday's peak market capitalization, Nvidia's share price has surged by 60%.

Amid a massive $430 billion sell-off spanning three days, traders are increasingly turning to technical analysis in search of clues for Nvidia's potential bottom. Technical analysis, though not an exact science, can offer investors a valuable guide by examining historical trading patterns. Taking a technical perspective, Nvidia's stock price has entered its first technical correction since April, marked by a decline exceeding 10% from recent highs. Analysts point to the $115 zone as a pivotal Fibonacci retracement level. This tool is commonly utilized by technical analysts to determine potential support or resistance thresholds for equities and other assets. The 38.2% retracement from Nvidia's April intraday low to its peak last week hovers around 2% below the price at Monday's close. Analysts suggest that there is short-term support near the $115 mark, with a subsequent significant threshold at $100.

Is it time to enter soon? What do you think?

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