To The Moon

While Bank stocks are still reeling from the debacle since 08 Mar 2023, funds that needed to be invested and traders that needed to daily speculate; found themselves going back their tried and tested Tech sector to seek solace.

Only this time round, they unanimously selected to focus their attention on Semiconductor stocks. And they could not have been more accurate than this.

Coupled with :

• Nvidia’s announcement of its most advanced AI-chip (Nvidia A100) in 23 Feb 2023.

• Accelerating AI software (ChatGPT, GPT-4, Bard) competition heating up the Tech scene rapidly.

The above catalytic combinations of “easy money” and “all things AI related”; helped to propel Nvidia stock price to recovery faster than it had taken it to fall.

Best Performing Mega Cap Stock.

So far, only 3 stocks with market cap > $400 Billion have generated a YTD returns of > 50%.

They are :

• $Meta Platforms, Inc.(META)$ - +52%.

• $Tesla Motors(TSLA)$ - +66%.

• $NVIDIA Corp(NVDA)$ - +79%. Of course it is the best performing of the 3.

With so much upside, is there a concern given that all things AI is still the talk of the town ?

There might be.

For starters, after 9 straight sessions of gains thru Thu (23 Mar 2023), the stock has slipped for the past 3 sessions (24 Mar to 28 Mar), after its relative strength index (RSI) briefly strayed into overbought territory.

Additionally, its valuation of > 150 times its previous 12 months’ earnings might put off value investors.  

The stock’s rapid ascent has not deterred Wall Street analysts.

With 42 buy-equivalent ratings, Nvidia has by far the most bullish recommendations of any chipmaker, according to data compiled by Bloomberg.

On 17 Mar 2023, Morgan Stanley has also upgraded the chip maker to “Overweight”, citing the boost the company is getting from the generational AI “megatrend.”

In a separate poll conducted on the immediate future of Nvidia - “Are we going to get another 80% from here in Nvidia in 3 months ? “ - most of the analysts gave an emphatic reply of “No.”

Lastly, the Nasdaq gaining +1.79% on Wed (29 Mar 2023), putting the tech-heavy gauge on course to extend its quarter-to-date gains.

Going Into Thu (30 Mar), This Is What I Feel :

• Based on Nvidia’s past 1 year performance, its current stock price of $269.84 is still -2.55% off its peak.

• This means there is still a possibility of +2.55% gain

• Having said that, it is also market magic that it is hard for bulls to fight a bullish trend until it fails.

• I feel that aggressive buyers can try to long Nvidia stock against ytd’s low of $265.97.

• Pessimistically, a break of this level ($265.97) — and especially a close below it — may have investors looking at the $250.87 area and the 21-day moving average.

• Optimistically, a ramp back to new 2023 highs will be most welcoming. And then it could open the door up to near $290. Maybe ?

• This is how I see it. Hee hee.

• Do you think there will still be more upside for Nvidia ?

• Do you think Nvidia will be able to break through its upper resistance ?

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