Here’s how you get the most out of Nvidia – June 20, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I’m going to go over NVIDIA ( NASDAQ: NVDA ) today. We’ve had some monster trades on this. They’re still going but today was a day to be taking partial profits. The stock hit 140.00, it ran through it just a little bit, but basically, 140.00 is the key level here.
It’s a level that I had mentioned to Cramer just last week, he covered it last Wednesday, and my target for a rest phase is 140.00. In the past, I’m not going to be drawing lines here, but in the past, the stock has had runs of 47 percent above the 50-day moving average before it ultimately took a rest, so that’s what I’m looking at here.
We’re at that point now, where it’s time for the stock to rest a little bit. Not by any means do I think it’s done going up. The weekly chart looks monstrous. The bottom line is, I still think we’ve got a $200.00 price target. I am seeing some analysts on the Street, I think Rosenblatt, whatever firm that is, raised the price target to 200.00. But I still think this is the range.
However, for me, it was time to take a little profit. Tomorrow is the end of the quarter. We will probably see some more buying in NVIDIA ( NASDAQ: NVDA ) because of end-of-quarter rebalancing on the XLK ( NYSEARCA: XLK ). And so that will have to bring up more buying. NVIDIA ( NASDAQ: NVDA ) is the most expensive stock in the universe right now. It’s got the highest market cap and the largest market cap.
There is going to be a lot of buying that’s coming in here. But at some point, you really want to start easing towards the exits on at least part of your position. Keep yourself in a position to win by continuing to hold some stock, but not to a point where you risk giving back a lot of your profit on a really big down day in the market, which ultimately we will have.
I think it’s a fool’s errand to try to predict it. A lot of people do and they wind up playing the fool a bunch of times. But then the one time they get it right they just want you to forget about all the stupid stuff that they’ve said before and they crown themselves as the new Nostradamus.
I don’t know how much money Nostradamus had, but my bet is he’d have made a really, really crappy trader because that guy was wrong a lot. It’s like he’s just pricking stuff out of a hat, and throwing it out there like a Chinese fortune cookie manufacturer. So don’t be that guy, just be a trader. Protect your profits, and be aggressive when it’s time to be aggressive.
And when you’re getting paid for being aggressive don’t just continue to be more and more aggressive. This is what newbies do. This is what beginning traders do. This is why the worst thing that can happen. And I’m going to leave you with this, the worst thing that can happen for somebody who’s just getting into the market, that’s really new to the market.
The worst thing that can happen is that they get in when there’s a bubble blowing up. I’m not saying this is a bubble but I’m not saying that it’s not. The worst thing that they can do is get in when there’s a bubble blowing up because they don’t even have to be smart or good to make a lot of money.
And so, they start making a lot of money and then continue to think, and by the way, I started during a situation like this, and so I know from whence I speak. They start feeling really, really confident, they start putting more and more money in. And then the first time the market does what markets do, a big dose of reality comes in and absolutely whacks them.
You don’t want to be that guy. Just trade within yourself. Stay long NVIDIA ( NASDAQ: NVDA ). But make sure that if you have some big profits go ahead and take some off the table. I mentioned this this morning to our members, you can protect your trade here, on any trade, in a couple of different ways.
First of all, of course, you could just sell it all, you could sell part of it. Or you could just hang on to all of it but set staggered stops. If you’re saying, Crap, you know man, I really should be taking 25 percent off. You can say, Okay well, I’m not going to do that but I’m going to set a stop on 25 percent of my position, maybe 3 percent below where it is right now.
Pick your number, maybe it’s 5 percent, just don’t make it too tight, otherwise, you might as well sell now. You set a stop that way and then after you’ve done that, then you have effectively closed that position and you know exactly what you sold that position for. Only you really didn’t close that position, it’s still open. Your downside is just protected.
Now, if the stock falls and you’re stopped out, that’s okay, that was part of your plan. If the stock, instead, continues to run, well that’s awesome because that was also part of your plan. So either way, no matter which outcome you get, it was a good trade because it was well reasoned. It took into account the two sides of risk, the risk of loss, versus, the risk of missing out on profits. If you are doing that kind of thing I think you are going to do really, really well over time. I know you are going to do really, really well over time.
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