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Pop Goes Nvidia – The Week Ahead Highlights

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.

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The Week Ahead

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It will be a short trading week, with the markets closed on Thursday for Thanksgiving, and a 1 pm close on Friday. It doesn’t mean it may not be an active week, which based on the charts, it very well could be.

The 15-minute chart of the S&P 500 shows the selling we had seen for most of the last week, except for Thursday, is likely not finished.  The rally on Thursday failed to fill the gap created on November 9. Additionally, the inability of the index to generate any follow through on Friday was also a disappointment.

S&P 500

Technology

There was a similar price action in the Technology ETF $XLK as well. The technology sector has taken over as the clear leader in the marketplace since Biotech’s mid-October meltdown. Should technology continue to stumble, the market as a whole will continue to struggle.

Technology is easily the market leader in 2017, with shares of the XLK up by 31 percent in 2017. Where Technology goes, the market will be for sure to follow. The setup in some of the leading components does not look promising over the short-term.

technology

IBB data by YCharts

Microsoft

Microsoft ($MSFT) looks as though it is heading towards the gap created after it reported strong quarterly results. It means shares are looking for a 3-4 percent pullback from the current level of roughly $82.50 to $79.25.

microsoft

Even Apple ($AAPL) looks susceptible to a pullback from around $170 to approximately $160, after running into resistance.

apple

Facebook has about $10 downside risk from the current level around $180 to about $170.

The same could be said for shares of Alphabet.

alphabet

If the technology sector starts trading lower than the entire market trades lower it is that simple.

The sell-off surely isn’t a doomsday type of scenario; this will likely be a continuation of what we have already seen. This slow pullback creating 3-4 percent decline in the S&P 500 ($SPY).


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Nailing The Biotech Breakout

Biotech’s Signal A Bottom

GE: Just Not Worth It Anymore

Disney Is Just Too Cheap


Nvidia

Nvidia’s ($NVDA) is just down and out scary, it has gone completely parabolic. With the rate of the current rise, it can do nothing from here except go up in a nearly straight line. I’d hate to say it to all the Nvidia longs, but this run looks like it nearing an end.

nvda

How can you look at this chart above, and not admit that it makes you a little bit nervous? Then when you see this next chart, you have to be scared.

Nvidia

Experience has taught me through the years that stocks tend to find a trend and stick with it for some time. Then when the rally is starting to come to an end, the slope of the trend tends to turn higher, like on an expoential curve. But in this case, you can now see that the slope hasn’t changed once, but now twice. The uptrend has continued to steepen, which means the rise is accerlating. I have rarely if ever seen anything like it.

Cisco in the late 1990’s reminds me of this, as does Intel, which I recently wrote in an Investopedia article, and you can find it below in the free article section.

Don’t be so certain it will be different this time.

Free Articles Written By Mike: 

Why Biotech Sage Therapeutics Is Overvalued

Why NVIDIA’s Valuation May Be A Giant Bubble

Intel Could Fall 10 Percent Before Long-Term Rise

One Thing The Yield Curve Says About Stocks

Tesla’s Stock Heads To A Crossroad

Why Coca-Cola’s Biggest Return May Be Frustration

Biotech Alkermes Could Jump On Opioid Treatment Sales

Why GM Could Slide 10% After Bull Run

Why Biotech Stocks Are Nearing a Rebound

Higher Bid For Qualcomm Is Unlikely, Traders Indicate

Why Netflix, Nike and Starbucks Are Breaking Out

S&P 500 May Pull Back, Setting Up 20% Gain By End 2018

McDonald’s and Starbucks: A Case of Perception Vs. Reality

Nvidia Traders Expect More Gains for the Stock

Biotech Celgene Could Rebound By More Than 15%

Exxon, Chevron, and Oil Are Breaking Out

We offer a lot of great commentaries all week talking about the major and relevant market events. Be sure to subscribe to get all our free commentaries sent directly to your inbox or follow us on Twitter.

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Michael Kramer owns XLK Puts

Michael Kramer and the Clients of Mott Capital owns shares of GOOGL

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Tags: #Nvidia #SP500 #Technology #Microsoft #Alphabet #Facebook #xlk