Great analysis, my primary concern or issue on all this is where is all the downward price pressure on NVIDIA coming from? It reaches oversold levels, shoots up a small bit and promptly gets sold back down to price support. Just like it kept hitting resistance at 130 last week. Where is all this coming from and why is the stock so unable to run up right now like it was able to in January and May?
Great correlation btw with what happened a year ago when it dropped down to low 400s after earnings and didn’t breach 500 until January after flirting with it in August earnings report.
There are literally 100’s of thousands of different people in the stock. Different funds have different risk policies. Then you have quant funds, market makers and algorithms. It’s nearly impossible to know exactly where the pressure is coming from unless someone disclosing what they’re doing. Far too many factors and market participants to pin the move on any way area.
But what we do know is that stocks and markets are highly correlated. If the market is trending in a direction, it’s going to come drastically impact Nvidia and push the stock in the same general direction. NVDA has a higher beta than the indices and so whatever the market does, Nvidia will do but at much greater percentages.
Marvin Esch
August 29, 2024 7:01 pm
Last hour, looks really rough. Lot of selling pressure. fear that it will just consolidate lower til RSI resets and legs even lower.
Thanks for the analysis, Sam. I would like to add another point about how the media is trying to manipulate NVDA by showering negative news that is mostly fabricated. In particuar, there is an analyst named Gil Luria that everyone here is probably familiar with. He has been extremely bearish on NVDA for the longest time, which makes no sense to me, other than the fact that his life mission is to suppress NVDA at all times.
Yesterday’s Bloomberg post-earnings session, he appeared and basically spread some outright lies, despite Jensen’s comments which clarified counterpoints to those lies. A couple of the standout lies Gil Luria indulged in:
LIE 1: Nvidia’s only siginificant customers are the hyperscalers (MSFT, AWS, GOOG etc.) while discounting the growing Sovereign AI customer base.
LIE 2: Blackwell delays will hamper next quarter sales revenue.
Jensen’s real-time comments during his interview with Bloomberg basically countered both these lies, but I think the damage has been done, at least in the short term, before the Market shows its propensity for amnesia and regains some sense.
To echo a question above, where is the downward selling pressure coming from? Is it the institutional investors who keep doing massive selloff across the markets know retail will buy it back up? And repeat?
Maybe Sam will also respond, but as far as I can tell, it is the Options traders manipulating the demand/supply dynamics because of course, they do not want to lose money on their puts and calls.
That can happen. But that would only be an ultra near-term phenomenon.
It’s important to remember that this is a $3 trillion company and no one institution can really manipulate the stock.
The firepower simply isn’t there. Just look at the volume at which in Nvidia trades each day.
Maniac iscool
August 29, 2024 9:26 pm
I bought 4k worth of NVDL today @58
Also, bought one 120c Dec2026 expiry worth 4k
Will sell when it hits 130ish.
Kiran Kumar
August 29, 2024 10:39 pm
In the short-term they are wiping out bulls and bears on different days. Tomorrow might be a bounce to 125 level to wipe out puts bought today. Too much optimism on NVDA is working against the price I think. Next week or following week might be better.
Unless I’m missing something, wouldn’t we need a catalyst like an announcement or some news to see it come back up to 125-130 range? The only next event (that I’m aware of) would be probably the FOMC mid-September and maaaybe Broadcomm earnings? (Genuine questions) Would love to hear from Sam on this too.
So I totally understand that this would be the intuitive way to think about things, but stocks mostly rally without any catalysts at all.
If the entire NASDAQ 100 begins rallying, it pulls everything up with it. All stocks trade in unison with the market. The only difference is the beta. Some stocks are going to outperform and some stocks are going to underperform.
Now it may seem that it’s catalysts, but there is always some catalyst in the future. There is always something on the horizon.
For example, on August 5, when Nvidia hit $90 a share and then rebounded all day long, it wasn’t just Nvidia. If you look at any stock on the NASDAQ 100 you’d see the same exact thing.
Some might say that it was NVDA’s earnings coming up in three weeks that was the catalyst for the 3-week rally.
But ALMOST none of the other stocks on NASDAQ-100 had earnings to report at the end of August. Most companies would have reported by the end of July.
But if you look at the charts of all the stocks on the NASDAQ 100, They look identical over the last four weeks. All of them have a huge rally off of the August lows, all of them peaked last week and all of them traded lower this week except for Apple and Netflix. You have a few exceptions due to stock-specific news.
This is not to say that catalysts can’t impact the stock. It’s that the stock can move and move big time without any catalysts at all.
Though the financial press will always make it seem like there’s a catalyst because it’s their job to sell a story. You’re never going to hear the financial press say “Nvidia’s up 20% over the last couple weeks because it has strong fundamentals and people decided to buy it.” That doesn’t make for a good story. But it may very well just be the truth.
By
/ August 29, 2024 
Great analysis, my primary concern or issue on all this is where is all the downward price pressure on NVIDIA coming from? It reaches oversold levels, shoots up a small bit and promptly gets sold back down to price support. Just like it kept hitting resistance at 130 last week. Where is all this coming from and why is the stock so unable to run up right now like it was able to in January and May?
Great correlation btw with what happened a year ago when it dropped down to low 400s after earnings and didn’t breach 500 until January after flirting with it in August earnings report.
There are literally 100’s of thousands of different people in the stock. Different funds have different risk policies. Then you have quant funds, market makers and algorithms. It’s nearly impossible to know exactly where the pressure is coming from unless someone disclosing what they’re doing. Far too many factors and market participants to pin the move on any way area.
But what we do know is that stocks and markets are highly correlated. If the market is trending in a direction, it’s going to come drastically impact Nvidia and push the stock in the same general direction. NVDA has a higher beta than the indices and so whatever the market does, Nvidia will do but at much greater percentages.
Last hour, looks really rough. Lot of selling pressure. fear that it will just consolidate lower til RSI resets and legs even lower.
Really tempted to buy some leaps right now with RSI 27-28.
Truly appreciate your timely posts!!! I’ll hold of getting more NVDA shares when the RSI near 27-28.
I meant RSI closer to 20ish…
Thanks for the analysis, Sam. I would like to add another point about how the media is trying to manipulate NVDA by showering negative news that is mostly fabricated. In particuar, there is an analyst named Gil Luria that everyone here is probably familiar with. He has been extremely bearish on NVDA for the longest time, which makes no sense to me, other than the fact that his life mission is to suppress NVDA at all times.
Yesterday’s Bloomberg post-earnings session, he appeared and basically spread some outright lies, despite Jensen’s comments which clarified counterpoints to those lies. A couple of the standout lies Gil Luria indulged in:
LIE 1: Nvidia’s only siginificant customers are the hyperscalers (MSFT, AWS, GOOG etc.) while discounting the growing Sovereign AI customer base.
LIE 2: Blackwell delays will hamper next quarter sales revenue.
Jensen’s real-time comments during his interview with Bloomberg basically countered both these lies, but I think the damage has been done, at least in the short term, before the Market shows its propensity for amnesia and regains some sense.
To echo a question above, where is the downward selling pressure coming from? Is it the institutional investors who keep doing massive selloff across the markets know retail will buy it back up? And repeat?
Maybe Sam will also respond, but as far as I can tell, it is the Options traders manipulating the demand/supply dynamics because of course, they do not want to lose money on their puts and calls.
That can happen. But that would only be an ultra near-term phenomenon.
It’s important to remember that this is a $3 trillion company and no one institution can really manipulate the stock.
The firepower simply isn’t there. Just look at the volume at which in Nvidia trades each day.
I bought 4k worth of NVDL today @58
Also, bought one 120c Dec2026 expiry worth 4k
Will sell when it hits 130ish.
In the short-term they are wiping out bulls and bears on different days. Tomorrow might be a bounce to 125 level to wipe out puts bought today. Too much optimism on NVDA is working against the price I think. Next week or following week might be better.
Unless I’m missing something, wouldn’t we need a catalyst like an announcement or some news to see it come back up to 125-130 range? The only next event (that I’m aware of) would be probably the FOMC mid-September and maaaybe Broadcomm earnings? (Genuine questions) Would love to hear from Sam on this too.
So I totally understand that this would be the intuitive way to think about things, but stocks mostly rally without any catalysts at all.
If the entire NASDAQ 100 begins rallying, it pulls everything up with it. All stocks trade in unison with the market. The only difference is the beta. Some stocks are going to outperform and some stocks are going to underperform.
Now it may seem that it’s catalysts, but there is always some catalyst in the future. There is always something on the horizon.
For example, on August 5, when Nvidia hit $90 a share and then rebounded all day long, it wasn’t just Nvidia. If you look at any stock on the NASDAQ 100 you’d see the same exact thing.
Some might say that it was NVDA’s earnings coming up in three weeks that was the catalyst for the 3-week rally.
But ALMOST none of the other stocks on NASDAQ-100 had earnings to report at the end of August. Most companies would have reported by the end of July.
But if you look at the charts of all the stocks on the NASDAQ 100, They look identical over the last four weeks. All of them have a huge rally off of the August lows, all of them peaked last week and all of them traded lower this week except for Apple and Netflix. You have a few exceptions due to stock-specific news.
This is not to say that catalysts can’t impact the stock. It’s that the stock can move and move big time without any catalysts at all.
Though the financial press will always make it seem like there’s a catalyst because it’s their job to sell a story. You’re never going to hear the financial press say “Nvidia’s up 20% over the last couple weeks because it has strong fundamentals and people decided to buy it.” That doesn’t make for a good story. But it may very well just be the truth.
Ahhh, I haven’t thought of it that way. Thanks for clarifying and providing data against the explanation!
Thank you so much for this helpful explanation! This really cuts through the noise for me.