The markets were a little dicey on Wednesday. It was the start of earnings season with JPMorgan and Delta reporting, while the FOMC announcement hit the wires yesterday at 2 pm.
After the Fed announcement, markets chopped around as per usual, although they did go out somewhat near the highs. More impressive than the market’s pre- or post-Fed reaction though, was the way growth stocks traded.
Twilio gained 5.9%, Digital Ocean (DOCN) made new highs and AMD gave us a powerful rotation higher. Facebook stabilized, while FANG was higher on the day (again pre- and post-Fed). So was Tesla and the semiconductor ETF (SMH), while ARKK doubled the daily gains of the Nasdaq.
Can Nvidia follow AMD higher? First AMD.
Trading AMD Stock
I love the way AMD has been trading. It gave us a classic “ABC” pullback to the prior breakout area near $100. It broke out over downtrend resistance (blue line) and chopped below the 50-day.
Then on Wednesday it gapped higher and gave us a 2x weekly-up rotation. From here, let’s see if it can clear $110 and run to the $114 to $115 area. That’s followed by the $120 to $122 zone.
The market’s correction may not be over, but growth stocks tipped their hand on Wednesday and it was at least enough for a short-term confidence boost.
Trading Nvidia Stock
Now Nvidia becomes the question. Like AMD, it gave us an “ABC” correction. But rather than dipping to the breakout zone, it dipped to the 21-week moving average.
Also like Nvidia, it’s chopping below the 50-day moving average. If we can get a push above $213.22, we’ll have a weekly-up rotation on our hands. Even more though, it will thrust NVDA above all of its major daily moving averages.
That could open the door to the $220 to $225 area, followed by resistance up at $230. On the downside, a break of this week’s low could put the 21-week moving average in play.
Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.