Nvidia May Face Even Steeper Declines; Stocks Rise More To Come?

Nvidia Faces Even Steeper Declines; Stocks Rise More To Come?

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

Otherwise, enjoy the column!

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Michael Kramer and the clients of Mott Capital own shares of ACAD, SWKS

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S&P 500 (SPX, SP500)

How ’bout that stocks can go up after all? I nearly forgot I was beginning to think they could only go down.  Today was the best day we have seen since, well, November 8. Does it last? I think it does. I was very encouraged by today’s price action in the S&P 500. The index managed to test support from yesterday lows right away. It held, and we rebounded the balance of the day. We rose above a 5-day downtrend and surpassed technical resistance at 2,716. Even better the bears tested that support late in the day and it held.  I think that sets the stage for a rise 2750.

spx, s&p 500, sp500


Additionally, the NASDAQ looks like it may be on its way higher towards 7,350.

nasdaq, ndx

Russell 2000 (RUT, IWO)

The Russell 2000, also broke its downtrend.


Nvidia (NVDA)

Nvidia just reported results. Wow! This one may be finished. Seriously.  The company is guiding earnings at $1.32 to $1.49 for the fourth quarter versus estimates of $2.01? Wow. In the fourth quarter last year they reported $1.72.  Revenue is guided to $2.7 billion at the mid-point versus estimates of $3.4 billion, are you kidding? Last year they did $2.9 billion. So are you seriously paying 22 times one year forward earnings for a chip company with not even slowing growth, not flat, but declining revenue and earnings y/y?  No way. Look at Skyworks, Qorvo, Broadcom, Micron, and every other chip company trades low double digits.

The street was not prepared for this, I have written over and over again, that every other chip was getting estimates cut, but not Nvidia. 

$169 was support, but the stock is trading $165 after hours. Next support comes at $158, then its around $140.  Yikes! Can’t say I wasn’t surprised. Wrote about on November 13. 

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nvidia, nvda

Amazon (AMZN)

Amazon, I still have a great deal of concern for here. It can’t get over $1620.  The upside may be limited to around $1680, while the downside is about $1450.




AMD is going to down right along with Nvidia. A drop below $20 on AMD gets it rolling towards $16.


Acadia (ACAD)

Acadia went up too! How about that. Perhaps the recent decline was merely a retest of the breakout. The RSI is still firmly rising.

acad, acadia

Facebook (FB)

More Facebook fallout today. It seems like these Facebook stories get worse and worse all the time. $140 is a crucial level. A break below that means $133.

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That enough for today!


Photo Credit Via Flickr

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

Nvidia, amazon, sp500, nasdaq, amazon, amd, facebook