NVDA & TSLA

This is a quick hits article for ticker symbols NVDA & TSLA. Those ticker symbols represent the publicly traded companies of nVidia Corporation & Tesla, respectively.

These are 2 very different stocks in different sectors that do have one thing in common. Their charts have been on fire over the last several weeks! It’s almost like money has been growing on trees for these 2 stocks…..

With such massive moves to the upside, investors have reason to be cautious. Is it time to prune some profits? Or should you continue to let the tree grow wild for a little bit?

First, take a quick peek at the charts for these companies and see how they are progressing towards their overall price targets. I will try to find out some answers, including whether to the take profits or not, and possibly even a trading strategy based on the results of the chart analysis. So let’s get started!

nVidia Corporation (NVDA)

In my previous full-length update for nVidia Corporation (NVDA), I made the following statement:

A healthy uptrend always has at least some correction or consolidation period as some take gains. As more sellers leave a stock, it is easier for a stock’s share price to rise.

Well, that last consolidation period must have rid any remaining investors that were looking to sell their positions; NVDA’s share price has screamed over 50% higher in the last 6 weeks. NVDA’s share price hit a recent high of $168.50.

The previous full-length article for nVidia can be quickly accessed here “2/6/2017 – nVidia Corporation (NVDA)“.

I also stated in that article what I thought was the key to watch for NVDA’s share price:

The important take-away from the above chart for nVidia Corporation (NVDA) – watch the price activity at the $120 level. If NVDA’s share price can break and close above that area, there is a possibility that the bullish scenario of reaching the 261.8% Target Line could be in play. The 261.8% Target Line resides around the $159 area.

Buying shares when NVDA’s share price broke above the $120 area could have yielded gains of over 20% since the breakout. The breakout above the $120 area was only 7 weeks ago. A 20% gain in 7 weeks is pretty darn good. A target pullback zone for NVDA’s share price was also identified in that update.

This first chart for nVidia Corporation (NVDA) will look at the 261.8% Target Line from my previous article. It is a 2 year weekly candlestick chart.

The 261.8% Target Line from the black Fibonacci Extension Tool had a $159 price target. NVDA’s share price reached that upside price target 2 weeks ago. That upside price target was identified back in February in the above linked article.

I’ve overlaid 2 additional Fibonacci Extension Tools on the chart, a blue one and a green one. I’ll discuss the results of what I see below.

Calculating Possible Overhead Price Targets for nVidia Corporations (NVDA) Share Price

Here is what I see based on the share price action that developed over the last few weeks[s2If !current_user_can(access_s2member_level1)]……

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The MACD Histogram had a slow down in buying momentum last week; use any pullback to the $140 area as an opportunity to trade it back up towards its previous high
The Golden Ratio (161.8% Target Line) for the blue Fibonacci Extension Tool provides for an approximate $200 share price
The confluence of price targets around the $160 price level indicate some stronger overhead resistance for NVDA’s share price
- A close above the $160 price level on buying volume that is above average will be the indicator that the $200 price objective is now in play
The $200 area is where I would start scaling out of a position on the stock

Confluence areas are areas where price targets of multiple trading tools or technical analysis methods meet. The confluence of price targets at the $160 price level indicate some probable resistance at that area. Use any pullback of 10% or so towards the $140 price level to repurchase any sold shares or to make a scale-in entry and jump in on the uptrend.

Tesla (TSLA)

Tesla has been motoring along to my “conservative” $400 price target over the last couple of weeks. My $400 “conservative” price target was issued while TSLA’s share price was around the $260 price area.

“4/6/2017 – Tesla (TSLA) Stock Chart Tune-Up”

The first thing I want to discuss is the “conservative” $400 price target I calculated. I used the word conservative in that update because I was looking at long-term golden ratios that showed the possibilities for much higher share prices.

But in general, I think a good investing style or strategy is to initially be conservative with price targets while understanding there is still room for upside potential. That was exactly what I did for Tesla (TSLA).

Now that the conservative price target is close to being met, let’s expand the analysis and analyze the probability that even higher price objectives can be met.

This chart for Tesla (TSLA) is a 5 year weekly candlestick chart. This analysis takes an Elliott Wave pattern approach and tries to identify the various “trends of different degrees”. The longer-term trend and price objectives are identified with the blue waves and blue Fibonacci Extension Tool.

Analyzing Longer-Term Price Objectives Using Elliott Wave Theory

TSLA’s share price has seen increasing buying volume since January 2017. As a result, the buying momentum indicated by the MACD Histogram is also showing increasing momentum. These are both bullish factors that indicate still higher share prices for Tesla (TSLA).

Shorter-term, TSLA’s share price may become more volatile as its share price get closer to the $400 price objective. It has reached its shorter-term Golden Ratio (the black 161.8% Target Line from the Fibonacci Extension Tool).

One strategy is to sell some trading shares at prices above $400 but retain a core position. I anticipate TSLA’s share price could even reach as high as the $450 price level. Look to repurchase any sold shares on a pullback to the $400 price level then.

If TSLA’s share price reaches $400 and starts to pullback, you may not get the chance to sell above $400. If that happens, consider holding onto your position and adding additional trading shares on the pullback. The place to add-on shares would in the $325 – $350 price range.

Based on the above analysis though, I think the break above $400 and then a pullback to the $400 level is more probable. And if news comes out that TSLA will be expanding in China soon, that just may be the catalyst needed to boost TSLA’s share price through resistance and up towards its longer-term Golden Ratio. The longer-term Golden Ratio sits at the $557.88 price level and is identified by the blue 161.8% Target Line from the blue Fibonacci Extension Tool. The pedal is on the metal for now…

Good luck trading!

On Deck: J&J Snack Foods Corporation (JJSF)

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