NVIDIA’s stock price movement
After outperforming the market for the last three years, NVIDIA’s (NVDA) stock underperformed the market in 2018 as the stock fell significantly after the crypto bubble burst. NVIDIA’s stock fell 45% since October 1 while its rival Advanced Micro Devices (AMD) fell 21.6% and the VanEck Vectors Semiconductor ETF (SMH) and S&P 500 Index (SPY) fell 2% and 4.4%, respectively.
NVIDIA’s stock bottomed out on December 24 as the semiconductor industry bottomed out. These declines put NVIDIA in a downtrend. The stock recovered slightly in 2019, growing 16.5% year-to-date and is growing further as it launches new mid-range gaming products and US-China trade talks progress.
After a turbulent four months of significant ups and downs, NVIDIA and AMD stabilized slightly, returning to normal trading volumes in February. Technical indicators study stock price movements and volume to find a pattern and estimate the future movement.
Moving averages or MAs take the average of a stock’s prices over a certain period to determine which direction its movement is skewed in. When the short-term MA is higher than the long-term MA, it shows technical strength.
NVIDIA’s current trading price of $158.7 is higher than its 50-day MA of $149.65 but lower than its 200-day MA of $199. There’s technical weakness in the stock as it’s still trading below its 200-day MA, but it’s showing signs of improvement as it moved past its 50-day MA. However, the stock still has a long way to recover from the downtrend.
While moving averages are weak for NVIDIA, they’re strong for AMD and Intel (INTC). AMD and Intel are trading above their 50- and 200-day MAs. Intel is already in an uptrend, as its current trading price is higher than its 50-day MA, which is higher than its 200-day MA. On the other hand, AMD’s 50-day MA is slightly lower than its 200-day MA as the stock rallied ~7% in the last ten days. If AMD can maintain its current stock price without significant drops, the stock will move to an uptrend.
Next in this series, we’ll see what investors think about Qualcomm stock.