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NVIDIA Stock Price Prediction (and a Contrarian Swing Long Coming Soon) | Forexlive

TradeCompass for NVIDIA Stock: Contrarian Long Opportunity Amid Pre-Market Decline

At the time of this analysis, NVIDIA (NVDA) is trading at $128.40, down nearly 10% in pre-market from Friday’s close. This presents an intriguing contrarian long opportunity for swing traders, leveraging key support levels from historical value areas and VWAP deviations. Below is a detailed trade idea based on volume profile analysis:

Trade Setup

Entry Levels (Equal Buys):

  1. 127.25 – Near the value area low (VAL) from December 19th and October 7th, as well as close to the pivot point formed on December 18th.
  2. 125.93 – Strategically placed between the first buy level and the third lower VWAP deviation of December 20th, adding more support to the zone.
  3. 124.67 – Near the extended support around the third lower VWAP deviation from December 20th.

Stop Loss:

  • 122.67 – Placed $2 below the final buy level, ensuring defined risk while allowing room for volatility.

Profit Targets (Partial Profits Encouraged):

  1. 129.93 – Just under the value area low (VAL) of January 14th.
  2. 132.62 – Close to the value area high (VAH) of January 27th.
  3. 138.86 – Under the VWAP from January 21st and near the $140 round number, offering a logical resistance level for a runner.

Execution Notes:

  • Equal Allocation: Buy 100 shares at each of the levels: 127.25, 125.93, and 124.67.
  • Risk-Reward: The stop loss at 122.67 ensures a manageable downside, while the profit-taking structure emphasizes maximizing gains with partial profits and leaving a runner for a potential larger move.

The Logic Behind the NVDA Stock Plan

  1. Volume Profile Support Zones:

    • The levels between 127.25 and 124.25 align with historical value areas and pivots, making this zone a critical area of extended support.

  2. VWAP Deviations:

    • The third lower VWAP deviation from December 20th near 124.25 offers additional technical backing, marking an area where price is statistically overextended.

  3. Pre-Earnings Setup:

    • Swing traders can benefit from a potential recovery bounce ahead of NVIDIA’s earnings, leaving flexibility to either close out the trade fully or hold a part of the Long (after taking partial profits before the earnings scheduled on 26 Feb 2025), AKA ‘runner‘ into the report. Again, at your risk only. Do your own research and treat this is an opinion and possible orientation.

  4. Risk Management and Partial Profits:

    • The TradeCompass approach emphasizes managing risk and taking profits at key levels to avoid disappointment from missed targets, while allowing a portion of the trade to benefit from larger moves.

TradeCompass Takeaway

This contrarian long trade idea provides a structured approach to capitalize on NVIDIA’s pre-market weakness, targeting a recovery toward key levels. While this analysis offers a framework for swing traders, execution and risk decisions are entirely up to the trader.

Trade at your own risk, and stay tuned for more TradeCompass insights!

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Trade Update: Managing the NVIDIA Trade Plan Amidst a Deep Decline

The pre-market action for NVIDIA has been unexpectedly bearish, dropping approximately 14% to $125.64, bringing the price uncomfortably close to our stop-loss level. Given this steep drop and its synchronization with the NASDAQ’s broader decline, this trade requires tighter risk management and a more cautious approach.

Adjustments to the Trade Plan

  1. Partial Profit Target:

    • If NVIDIA reaches $128.88, I will take 50% of the position off the table.
    • This partial profit allows us to mitigate risks and lock in some gains amidst the current uncertainty.

  2. Stop Management:

    • Once $128.88 is reached, I will move the stop for the remaining position to the weighted entry price.
    • This adjustment ensures the remaining position is risk-free, giving us flexibility in case of further downside.

  3. Trade Context:

    • Potential Scenarios:
      • Any rally from here could merely be a leg up in a trading range or a bear flag, signaling potential continuation of the downtrend.
      • We need to remain cautious and focus on mitigating risks rather than chasing aggressive upside.
    • Current Sentiment:
      • This trade is not looking strong at the moment, and my confidence in a significant rally is low.

Mitigation Strategy

The goal here is risk minimization and tight trade management. Given the pre-market weakness, this approach allows us to reduce exposure and adapt to any further bearish developments while maintaining a small portion of the trade for potential upside.

Next is to mitigate risk if and when NVIDIA stock price gets to $128.88 and adjust as described.