Just ended a grueling week in the US stock market.
Let's drive right into analysis of NVDA
Top down approach is my style to dissect the market: fundementals -> technical
This month is plagued with issues summarized below:
That Bearish engulfing candle on 26/8 (refer to weekly chart of NVDA)
High vix
Seasonality of September
Profit takings
institutions pulling out for now
Major indexes pulling back moving on to correction territory
Election uncertainty
Witching hrs on 20 September 2024
less jobless data
Price action volume does not support the rise past 2 days
Friday selloffs
Fomc declare rate cut that day will be sell the news event
Let's start with the macro fundemental analysis:
The vix is in the high zone now, meaning the sentiment is on the fear side. There might be panic sells and increased volatility.
major indexes like the Nasdaq S&P500 QQQ are pulling back may go into the correction territory.
This means we won't be seeing recovery soon.
As you can see, more to come. Take more of the critical dates
13 September might be the day QQQ/S&P500 pulls back the hardest. Today we have Nasdaq pulling back the hardest. Also take into consideration of Fridays as they are normally selloffs day.
Then after that we have 18 & 19 for FOMC. Be cautious of this being a selloff event rather than a moon day.
after FOMC is over we head into 20 Sep the quad/triple witching hours.
The last time we encounter quad witching hours was on 21 June whereby NVDA reached 140, then massive selloffs on 20 June (1 day before quad witching hours)
triple/quad witching hrs doesn't always have massive selloffs but they tend to increase volatility. Be cautious on these dates.
September will be a difficult month because of these reasons but Be happy that it is not due to recession.
that means whatever volatility in September will be ironed out in the long run. The longer trend is still bullish.
fade the short term trend against long term trend
technical analysis :
refer to to attach screenshot
NVDA is forming the inverted cup and handle chart pattern on the weekly chart.
The larger the timeframe, the more reliable it is. So this drop is imminent I suppose.
nasdaq is also forming the same pattern. So you can roughly guess what is ahead of you in this September.
And right now, things that will add on to the already messy September totally crush the market would be unexpected events like
Recession fears/war/yen carry trade/BOJ suddenly hike rates etc
Disclaimer: this writeup only serves as a guide and not a financial advise.
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