USO - Nvidia Traces A Negative Pattern $5.5T Quad Witching Slow Growth In Europe | Benzinga
To gain an edge, this is what you need to know today.
Negative Pattern
Please click here for an enlarged chart of NVIDIA Corp (NASDAQ: NVDA).
Note the following:
- The chart shows that NVDA stock opened higher yesterday. The higher opening was the result of more good news, pump during the holiday the day before, and continuing momentum from retail investors rushing in head long to buy.
- The chart shows that the stock closed lower than the prior trading day.
- The foregoing is a negative pattern that shows up as a bearish engulfing candle on a day chart.
- The pattern needs confirmation. Confirmation will be achieved if there is follow through to the downside today.
- The chart shows in the early trade, there is follow through to the downside.
- The momo crowd has been aggressively buying the dip.
- The chart shows that in spite of aggressive momo crowd buying, the VUD indicator was orange yesterday. Orange indicating net supply of stock. VUD indicator is the best way to ascertain net supply/demand in real time. As full disclosure, VUD indicator is one of many proprietary indicators of The Arora Report.
- If the incessant momo crowd buying causes the stock to close higher than the lower low shown on the chart, the pattern will be negated.
- A similar pattern occurred in NVDA stock on March 8, 2024. The pattern was followed by an approximate 20% drop in NVDA stock.
- Setting technicals aside, when a stock goes down on good news, it is a sign that a stock is getting over owned. In plain English this means that the stock is running out of buyers willing to buy at higher and higher prices, at least temporarily.
- NVDA is now becoming a cult stock and many investors are emotional about it. As full disclosure, readers and members of The Arora Report are long NVDA stock from $12.55, and NVDA is a large position in The Arora Report Model Portfolio.
- The notional value of quadruple witching today is about $5.5T. In quadruple witching, stock index futures, futures options, stock options, and single stock futures expire. Quadruple witching ...