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See 10:16 AM update on the Baratheon & Targaryen Trade Watch. If nvidia reaches extremely overbought near $137-$138, we’re closing out our near-term NVDA long trades and we might buy NVDA April $140 puts in baratheon only.
See 10:41 AM update covering NASDAQ-100 & Tesla which is on our trade watch now.
See 10:51 AM update. A small note on Palantir’s current valuation.
Hey Sam, isn’t Tesla also pretty overvalued right now in terms of forward PE etc.?
Or does that not matter when it comes to oversold conditions in the stock?
So with Tesla, we’re just trading it. But even setting that aside, Tesla is not really that overvalued. We don’t really bring up valuation concerns unless companies are really pushing that boundary.
Tesla goes through major buy and sell cycles. It’s on a big sell cycle right now down 26%.
Hi Sam, just looking for clarification on potential NVDA trades. Does RSI need to reach 80+ on the daily in order for you to sell the short term trades? It looks like the highest it got today was 75. Not sure if your outlook changes if 75 is the top and it dances around that for the rest of the day
So it needs to reach 80+ on the hourly. And we won’t sell it unless it actually gets up there. There’s no point for us to do that. We’ll only try to trade it in the near term if we’re very confident that it’s going to peak. We won’t be confident in a peak unless it gets to 80+.
Thank you sir!
Hi Sam if QQQ does breakout about 530, does this change your short term outlook of NVDA pulling back?
So those two things are independent. Even if the QQQ breaks out, Nvidia will still pullback if it reaches extremely overbought conditions.
While that trend is eventually bound to change, until it does, the most likely outcome for NVDA upon reaching extremely overbought conditions is peak and near-term pullback.
What’s you reading/plan on MSFT? I sold some yesterday (at loss) when it was higher and I’m thinking about buying it back if it goes below 410 $ or around 30 RSI.
Perhaps entering with a spread instead of a call. Your original thesis of market overreaction following their latest report may not have materialize fully, or just yet?
So the chart on MSFT still looks like it’s forming a base. It still hasn’t sustained a real snap-back rally since earnings. That’s what we’re kinda waiting for. We might bail on the trade if it doesn’t happen soon.
Will there be a scenario of NVDA rally to 150+ without pulling back ?
Yes. The stock can easily ignore overbought conditions and shoot the moon. There were periods during previous rallies where NVDA traded in that way.
It hasn’t done so since before the August correction however. So I do think it’s unlikely.
What’s more likely is a scenario where it sustains smaller pullbacks off of overbought conditions and moves substantially over a series of legs up.
So we could easily see the stock maybe falling to $125, rallying to $143, pulling back to $134, rallying to $150 etc. Segmented moves up. Larger rallies, smaller pullbacks all the way to its eventual highs.
That’s more likely than a vertical move straight up to $150 with deeply overbought conditions.