While Nvidia has had bouts of underperformance, it’s hard to deny just how well this stock has done over the years. Or the last few weeks.
Like Nvidia, Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report has also been red-hot. In fact, AMD actually kickstarted the rally between the two, with a powerful rotation earlier this month.
Nvidia followed suit and now both are enjoying new highs. Nvidia doesn’t report earnings until next month, but AMD reports on Tuesday after the close.
Consensus estimates have increased impressively for these two companies over the past 12 months. However, bulls may need to see that momentum continue to justify the rally we’ve seen so far in 2021.
Nvidia shares are up 91% so far in 2021, while AMD is up “just” 37%. Can Nvidia maintain momentum?
Trading Nvidia Stock
With Tuesday’s rally, Nvidia stock finally hit $250 a share, a level I have been looking at all month.
Why? Simple. Because the 161.8% extension of the current range comes into play near this area at $252. Not only that, but $250 is a psychologically relevant level. Further, on a pre-split basis, this was the $1,000 level.
Not that that matters too much at this point, but with all of these observations combined, it created an attractive upside target.
From here, I would love a minor pullback or some consolidation. As long as Nvidia remains above the 10-day moving average and the $230 breakout level, bulls remain in control.
Regarding those two levels, they may be excellent buy-the-dip areas for Nvidia stock.
On the upside, over $252 unlocks further upside extension levels, including the two-times range extension at $265 and the 261.8% extension near $287.
Could Nvidia be setting up for a mammoth year-end finish? It could. But some consolidation would be healthy too.