$NVDA: Post Earnings Drop Can Spook Bulls

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#Bonus #NVDA #Earnings

NVDA will report its quarterly earnings after the market close this afternoon.

NVDA Daily chart


That straightforward scenario allows bulls to make a major top in NVDA slightly above $200 (202-203). A spike up into the Red Box would complete the whole macro five wave up structure. If we get that spike up over 200 I would sell all long positions in NVDA and forget about that stock for weeks because we always expect a large corrective A-B-C down structure upon completion of a five wave up rally.

However, quite often, when only very small room is left for the market to maker the final push higher, the market avoids making that step in a straightforward fashion and takes an unexpected and painful detour.

This is how that alternative max pain scenario may look like in NVDA:

NVDA 120 min chart

That scenario is based on the assumption that NVDA has not completed a corrective wave (iv) down shaped as the tricky Expanding Triangle. The Expanding Triangle structure is composed of five micro waves labelled (a) down, (b) up, (c) down, (d) up, and, finally, (e) down.

If we get a spike on the first data release up to 187 – 190 I would close a long position because then we can get a sharp drop under 170 down to the green box. That spike up making a new all time high would make a subwave (d) up.

A subsequent sharp drop down to 170 would be the final subwave (e) down.

That Expanding Triangle is relative rare scenario. So consider that as your plan B.

If market reacts to NVDA report in that way, first pushes up to 187 – 190 and then drops under 170 I would consider that an attractive long setup to ride the final rally targeting 200 – 205.


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