NOW what? That’s the question investors and traders are wrestling with after Nvidia Corp.’s (NVDA) epic meltdown. I have thoughts.
First, check out these two MoneyShow Charts of the Day. The first is a one-year daily chart, while the second is a five-year weekly chart.
NVDA (1-Year Daily Chart)
Source: TradingView
Starting with the daily, the news of CEO Jensen Huang’s troubles – and subsequent departure – fueled one of the highest-volume, waterfall-style declines I’ve seen in a while. The fact it happened to a mega-cap, widely held name like Nvidia makes it stand out even more. Roughly $2 TRILLION in market capitalization got wiped away...in only a month.
You can see that one support level around $190 failed to hold. Then the next selloff leg pushed NVDA shares down through a secondary support level. A big battle is being waged here – and we’ll have to see if the bulls have enough fight left in them.
NVDA (5-Year Weekly Chart)
Source: TradingView
Zooming out to look at the big picture, you can see why this $165-and-change level is so important. NVDA already broke trendline support. Now, we have to see if this turns out to be like April 2025. That’s when NVDA held key support, laying the groundwork for the next leg up. If that setup fails, NVDA could end up a “broken” stock for a lot longer.
Returning to the question from earlier...NOW what?
First, if you can afford to, sit tight. Whether you’re a short-term trader OR a long-term investor, you want to see how the stock behaves around this key area. There are plenty of other charts that aren’t of the “could go one way, could go the other” variety. Focus on them for now.
Second, if you want to take on more risk and simply can’t wait, at least leg in. Say you have $10,000 you’ve been itching to put into NVDA. Put $2,000 or $3,000 in now. Then hold the rest of your capital in reserve. You can always buy more once the technical picture is clearer. No need to be a hero.
Third, as I keep saying, do NOT own JUST tech! There are other sectors that have been outperforming tech for a while. Nvidia has been a great company (and until recently, stock). But you have thousands of others you can trade and invest in, too. Broadening your horizons is a great strategy
