This chart of NVDA, above, shows all of our favorite, leading, coincident, and lagging technical indicators all in gear on the upside. The On-Balance-Volume (OBV) line is confirming the advance and broke out with prices in September. The Moving Average Congergence Divergence (MACD) oscillator is in positive territory and the 50-day and 200-day simple moving averages remain in uptrends with positive slopes. All good here.
This point and figure chart, above, looks at all the intraday swings in price for NVDA. Volume is ignored, and so is time in a sense that the chart is plotted when prices change and not when the earth rotates. This chart shows the upside breakout clearly, and gives us a price target based on this method of charting. Using this chart and other techniques, we have price targets for NVDA in the $34 area and then the $37 area. Traders could go long here, or on a shallow dip, and then use a sell stop or risk point two to three dollars from entry.
TheStreet Ratings team rates NVIDIA CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
We rate NVIDIA CORP (NVDA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 6.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 6.16, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 41.93% and other important driving factors, this stock has surged by 55.52% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NVDA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 42.2% when compared to the same quarter one year prior, rising from $172.97 million to $246.00 million.
- You can view the full analysis from the report here: NVDA
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.