Nvidia – New Buying Opportunity In The Horizon?

Nvidia Corporation (Nasdaq: NVDA) has grown to become a leader in manufacturing graphic processing units (GPU) for computer and gaming devices as well as Artificial Intelligence (AI). In the recent 2 years, the American company benefited the most from the growth of cryptocurrency and artificial intelligence markets. However, back in October 2018, the stock made a major peak at $292 and started correcting to the downside loosing more than 50% of its value in 2 months.

Nvidia stock wasn’t the only one being hit in recent decline as it’s direct competitor, Advanced Micro Devices (Nasdaq: AMD), suffered a 45% decline in October among other Technology and Semiconductor stocks around the world. Market sentiment started to switch as many investors considered the move to be just the first leg of a bear market but is that really the case? It could be or it the current decline could end all the correction and start another major rally into new all-time highs. We do understand that long-term investors take positions based on fundamentals analysis such as the company’s competitive environment, corporate strategy, management, products, earnings outlook, valuation and/or balance sheet but technical analysis can highlight high probability inflection areas in the market which can act as a great entry points regardless of whether you are a trader looking to hold the stock for a few weeks to a few months or an investor looking for to hold the stock from a few months to a few years. I will present the technical picture based in Elliott Wave and highlight the next inflection area in the stock.

Based on the Elliott Wave Theory, NVDA has been in a bullish trend since IPO low in 1999 and the stock advanced in an impulsive 5 waves move. The multi-year rally finally ended last month representing the Grand Super Cycle wave ((I)) which triggered the current decline taking place in wave ((II)). According to Elliott Wave Theory, when a 5 wave impulse ends, there will be a correction caused by buyers taking profits.

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