NVIDIA has had a big move up…how to handle the stock now.

NVIDIA
DIA
Corporation has been in the media recently due to interest in AI. The May 25^th price rise reflected their blowout earnings report on that day. The jump led to a record increase in market value. Fundamental analysis might suggest that the stock is overvalued while technical analysis could say that the shares are overbought. Let us take a cycles-based approach.

First, we look at the daily bar graph. Note that after the big price move, there was no pullback. The share price simply consolidated in a narrow range from which it now has broken out to the upside. Momentum is oversold and is turning up. Relative strength has hit a new high. The $475 price is the next objective. Seasonal strength lies ahead. The stock has risen 75% of the time from August 1 through yearend. Looking at the monthly cycle projection, we do not see a major high until the fourth quarter. The longer-term price target is in the $550 area.

Let me add a note from the field of sentiment. On June 12^th, Time featured a cover that asked if AI would be the end of humanity. I read this as a negative reflection on AI. Stories on the covers of magazines have been found to manifest in reverse of the direction to that which the cover suggests. Thus, the application of contrary opinion to this downbeat statement is likely to lead to a positive outcome for AI and for NVIDIA.