Week Ahead: Long or Short Nvidia and the AI Theme?

Week Ahead, 25 Nov 2024

Macro News:
All eyes were on Nvidia Corp this week as the company reported another set of record earnings. However, the revenue forecast fell short of analysts' expectations, causing the stock price to decline by -3.22% on Friday.

Based on historical price action, the stock often experiences profit-taking or selling pressure after earnings announcements. Technically, as long as NVDA remains above the 150-day Simple Moving Average (SMA), the medium-term uptrend momentum persists. If NVDA trades below this level, we will reassess not only Nvidia Corp but also the overall medium-term trend of the AI theme.

Medium Term:

· S&P 500: The S&P 500 index is retesting the 6,000 level, with immediate support at the 5,800 level.

· STI: The Straits Times Index (STI) has returned to the resistance zone at 3,730. No significant technical signals have been observed. If momentum continues, the index could move towards the 3,860 level.

· Hang Seng Index: The Hang Seng Index is nearing the 19,000 level, a key support level (Fibonacci 61.80%). Technically, the ability to maintain above this level indicates that the uptrend remains intact.

Long Term:

· S&P 500 remains upward

· Hang Seng Index (HSI) remains upward

· Straits Times Index (STI) neutral to upward trend.

Headlines Next Week:

- OPEC+ Meeting

- US FOMC meeting minutes, PCE Inflation data, 2nd est 3Q24 GDP, Shorten trading week
- China Nov PMI
- SG Oct CPI, Ind Prod

Disclaimers apply

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

DBS Group Holdings (D05): Upward Move Expectations

DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator. Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply

Market Technician

Search This Blog