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Asset Watch

Will NVIDIA sidestep bearish seasonality?

Thursday June 20, 2024

The June doldrums are upon us, and the S&P 500 often struggles mightily during the latter half of the month. However, if a healthy correction hits Big Tech, it could provide a nice opportunity to capitalise on NVIDIA’s momentum.
Rosenblatt Securities analysts increased their NVIDIA price target from $140 to $200 on Jun. 18, saying the stock’s 40x price-to-earnings (P/E) multiple and projected 2026 earnings per share (EPS) of $200 justifies a nearly 50% rally.
“We see NVIDIA’s Hopper, Blackwell, and Rubin series driving ‘value’ market share in one of Silicon Valley’s most successful silicon/platform product cycles,” the team wrote.
While the long-term fundamental outlook remains robust, could a solid entry point be on the horizon for momentum investors?

To play it, pay close attention to NVIDIA’s 50-hour moving average (the blue line). The key level has acted as support several times over the last month and a half, and a pullback to the blue line represents a roughly 6% correction. But please note the blue line will keep rising the longer NVIDIA trades above it, so you need to monitor it for changes.

 

Supporting a short-term pullback, NVIDIA’s hourly RSI peaked on May 28 and has been making lower highs ever since. As a result, the bearish divergence signals decelerating momentum, and when combined with bearish seasonality, may provide the necessary fuel for a pullback to the 50-hour MA.

 

So, should you practice patience in the days ahead or board the NVIDIA train before it leaves the station?


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