NVIDIAAtualizado

NVDA - Bull trap being set up

Before you start to hate on this analysis, keep in mind its just an analysis.

I like NVDA fundamentally, I think its a great company. But with that being said, the chart is the only truth. This chart looks sick.

We have broken a MAJOR uptrend.

Watch for the S/R flip and an exhaustion push to the upside as we see overall market sentiment pushing up as well. This to me is a major bull trap.

Short opportunities will be great once we see the current buying steam run out here.

(Long term investors are not buying up at these levels - the only buying thats happening right now is from position size shorts taking profits and MM"s hedging)

Nota

Zoom out a bit, we can see there is a larger uptrend at play here. This thick red line is just one of our accelerated trendlines that formed since 2020.

I will look to play short term puts when they set up and look to buy long term swing trades upon us finding support on that red dotted uptrend.

I would need to see us break 320 with conviction and volume before I believe this assessment to be incorrect.

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Zoom all the way out on this one and notice the accelerating trend lines. The first few are starting to break.

We experienced multiple 80%+ drawdowns on this chart over the years. Dont think we cant see another one.

Personally I dont think we see a massive drawdown as before, I think we see more stagnant growth potentially forming in some large big tech names.

Copied and pasted the price action after 2008, then stretched it just a little bit. You can see that this could be flat for years to come.

Nota

This thing has made some pretty unsustainable price structure over the last 6 years with only one real correction. Fundamentals could scream bullish but the structure isnt there and those holding most of the supply control the price. The avg 30day volume is barely over 2% of the total float.

nearly 70% of the float is owned by institutions such as vanguard and black rock being the 2 biggest

If and when these people want to unwind some of these positions, they shouldnt have a problem overwhelming the daily volume demand of retail buyers who just lack the overall cost basis to keep up with these companies that have such a low cost basis on their shares. These large institutions could be selling well under $50 and still turning massive profits.

IFFFF we are truly going to do something like my charts suggest, it will not be easy for these companies to unwind some of these positions without stirring up a lot of volatility and chop.

Institutions like to steal from other institutions - I could easily see these top 3 holders putting supply pressures on the market to get a few of those smaller institutional holders to give up their bags (nearly 3000 institutions holding NVDA). The larger institutions buy them up and we get a few nice V shape violent rips back to the upside on the way down.

Just trying to think about how and why that kind of price structure would play out.

Nota

Still on track here.

Remember when they told you it was bullish after earnings! Gotta see the bigger picture to avoid the traps. Its hard to sell off something like NVDA so they need to really work hard to generate outside supply into the markets.

Nota

I really didnt think they would push it up to my second white line and really get a good touch on that trendline. But the fact that they did, only gives me more confidence in this assessment for the longer term. I went short a bit early on Feb 1st. Small position I will look to build on as we near a possible breakout.

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Looking for some sort of reaction around the psychological 200.

Pulling some fibs to help get an idea where we could see another counter trend start to form.

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Sorry for the delay in keeping this updated.

Lets review.

Here is what NVDA looks like at this very moment with the original Analysis.

Nota

We nailed this on the long time frame and I had some success and failures playing intraday options on a lot of these rallies and sell offs. (I tried fading a few shorts on that extreme rally in april but was too early. This is a weakness of mine when i have a great long term view, i tend to be a bit early on some of my shorter term trades)

Nota

We can clean this chart up now and start to look for further downside continuation on the longer time frame.

Start by drawing some resistance levels and adding back in our large support level we called back in Jan.

Nota

My weekly blue moving average (custom script check my profile) is starting to curve down. We are well under my green MA too - yet still far away from the 200 simple moving average (in red). This is like a purgatory. The market is confused, beat up and scared. If larger positions are going to unwind, we will need to see another rotation back up at some point - imo. So i start to look at the underside of that large red downtrend I drew connecting the first two lower highs. To confirm this as a resistance line, we would need to see 1 more touch to it.

If we are going to start to rotate back up, that is where I would look to see us finding major resistance.

Nota

Lets start to identify some more zones to work with.

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Just for visualization purposes - look what happens when we copy and paste the correction we saw throughout the earlier part of this year.

Will we see something similar this time around?

Nota

Forgot to add this:

You could have put all the complicated TA aside and just used this tweet as your sell signal LOLLLLL

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Remember who was telling you where to look for a bull trap at that level, and who was telling you to buy into an exhaustion move ;)

Nota

Referencing the chart above from May 23rd and using the previous ripping rally as a visual to see the potential of another one starting to form last month.

This is how its played out so far... LOL

Pretty darn similar..

Nota

We have fallen through the floor and finally found the top of the trading range we identified at the beginning of this public post.

We were tracking last month on a similar fractal from the previous counter trend. It played out for a while until recently.

Now that we know the landmine exploded, we can start to create more accelerating trendlines, S/R levels and create new zones to monitor as we approach this trading range.

Nota

Lets take the volume profile of that range and identify the POC. Its rather similar to our white midline.

Nota

We can adjust these trendlines a bit. I adjusted the white one to account for the recent rejection of the previous landmine.

The downtrend line that encountered march's wild counter trend and false breakout is now a dotted line. Watch for another posible fake out breakout on this line

New landmine in place, new small bulltrap zone to monitor, and a chop and drop zone. Watch if price gets caught chopping on top of this previous range and eats up time until we get to the trendline and possible drop further into the previous range.

Nota

Added an obvious resistance level. Added back some lines that identify two gaps we never closed. (those may be important in the future)

Nota

What if we see NVDA chop around for a long time. What would that look like?

Lets just take the trading range we are encountering and flip it upside down.

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Kind of freaky how that gets mapped out just by referencing that previous price action flipped upside down.

Remember these are for VISUALS. Not for predicting price action well into the future. Its just to give your eyes an idea how price can play out through these accelerating trendlines being mapped out over time.

Nota

Zooming out we can see we are finding support on that trading range and a massive trendline. This could still be setting up another macro level short again. Interesting to see if a counter trend really starts to form here. Could get squeezy.

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Could we see something like this play out again. A large macro short like we identified at the start of this post.

Nota

Lets pull the volume profile of the entire price range from 2015-present.

Then lets pull the interior fixed volume profile of the price action in between the two trading ranges.

We can identify important references like the 70% Value Area High level on the VP range.

We can also find some interesting volume nodes.

The small interior fixed range gives us a POC level to monitor if we breach into that no mans land.

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Good ol Nancy get you stuck in the bull trap? Or did you ride the wake of the pelosi yacht?

Keep an eye on this one, we do not have to see a long side ways chop in this bull trap, the floor can drop out fast in a thin market held up on the backs of shorts with limited supply

Nota

Starting to get confirmation of push back down within the bull trap zone.

The retracement of the last swing will be important to monitor.

This bull trap does not have to hold for as long as my lines show on the chart. I never try to map durations. Just to visualize structures.

I will update this soon with some levels on lower time frames to monitor this retracment.

Nota

Still playing out as we expected from july 5th.

Hope you didnt get pelosi'd

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Bulltrap was intense and We did not get a second response off that very large and long macro trendline. We sliced right through it.

We finally Hit the middle of that support zone I identified at the start of this Public Post 8 months ago.. Through all the BS and bear market rallies, I hope i helped one of you navigate this wild chart.

Taco0o0o

thetradeschool.net/courses/placement-exam-fast-start-to-trading/ -College Level courses I dare you to take the pretest! See what u know free!

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Taco0o0o

thetradeschool.net/courses/placement-exam-fast-start-to-trading/ -College Level courses I dare you to take the pretest! See what u know free!

Reach out for a discount code for our beginner course!

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