NVDA - Never regret taking profits !

3 ביוני

1) Everyone and their granny has heard of Nvdia by now.
Lots of new retail traders are pulling into this name as the craze continues.
My none-trader/investor friends have started asking if it's a good idea to "invest" now. That's a big red flag ! (My answer is no!)
Remember, retail investors always come in last and hold the bags when the stock sells off.

2) Fundamentals have started to degrade across the board in the US markets and lots of names started to go lower. Small caps are incapable of making a new high and have made what seems to be a corrective move up since April.
It's then a matter of time before the king follows.

3) Looking at the Elliott Wave count, we can clearly see that we're in a fifth wave, which for those that do not know, is the final move up before we see a considerable correction.
RSI, MACD (or your fav oscillator) shows divergence which happens between wave 3 and 5.

4) On the smaller time frame, we can hope for a continuation higher, but, the upside is limited to probably less than +20% seen that we've finished (are finishing) the extended third of a third wave, which is the sharpest and longest.



So, It's not a bad idea to start taking profits.
I'll close 75% of my longs now.
The rest on a drop below 1070$ or a move close to 1300$

6 ביוני

הערה

For those wondering why I closed most of my position.

1) Elliott Waves says that after a completed five wave move, comes a considerable correction. According to my wave count, we are, imho, finishing that fifth wave.

In rare occasions, it happens that wave 3 and 5 are very extended, meaning very large moves, thus giving us a potential target at +1650$.
But again, those happen rarely and I much rather focus on what has a higher occurrence chance, which is a quick and large correction after the fifth wave that takes a lot of time before potentially returning to it's highs again!

2) Risk/Reward: I'm in at 467$ with my initial stop at 450, meaning I got a 44R/R out of this ! Which is one of those trades that make your year seen that I am on average at a bit less than 10R on such types of trades.

3) As I showed with the black arrow, I don't think it's going up to 1300$ of higher in a straight line, it's going probably take a multiple weeks of sideways consolidations before reaching the target.

So, I much rather take my funds and put it somewhere else where I can maybe get 5% but in less than a week and can thus reiterate that again during the month, thus minimising my risk and maximising my returns (compounding!) and at the end get the same result if not better than keeping my positions here.

4) I simply don't want to give a large chunk of my returns (if not all) if a sell off happens... The risk is simply not worth that potential 15%