In early March 2018 I correctly predicted the topping zone for the rally in NVDA and suggested to short it once the stock gets there. Let me repost here the chart initially posted on 5 March 2018 without any changes.
Let’s see how that prediction played out. As you can see on the chart below the only change I made was update of my highest target from $288 to $294.
NVDA topped at $292.76.
Harmonic Elliott Wave methodology is a great powerful tool that enables you to make correct predictions about important reversal zones. However, you can also see that I expected it to top during summer time and the rally stretched to October 2018.That is why you always buy additional time if you go against the trend expecting reversal because there are no any reliable technique that helps you to pinpoint timing of a market turn.
Now let’s talk about my current expectations. I believe that NVDA topped in a large degree wave ( 3 ) up. From October 2018 top we should see a corrective wave ( 4 ) down. The initial move off the top is clearly structured as A-B-C. I count that move as wave ( A ) down. There is a potential that this move down has not completed yet. It still can drop lower into the upper green support zone targeting 44.0% retracement of the wave ( 3 ) up at $168.23. However, it nailed a usual 41.4% retracement fib for initial drop in wave ( A ) down and from here we may expect a corrective looking rally with an ugly structure in wave ( B ) up. Because bears were unable to drive prices in the initial drop in an impulsive five wave down structure, we may assign low probability to potential scenario of a strong zig-zag correction where the following decline in wave ( C ) would reach much lower levels (the lower green target zone). Taking into account tremendous strengths of the rally in wave ( 3 ) up and relatively weak structure of the first wave ( A ) down we may expect a flat structure of the wave ( 4 ) down. That implies that the coming move in wave ( B ) up may reach the previous highs (under the regular flat correction) or even make a new higher high (under the running or expanding flat correction ). However, the conservative expectation for that coming wave ( B ) up would be 61.8% – 76.4% retracement of the drop in the wave ( A ) down. This is where I drew the red target zone.